Good afternoon and welcome to Bill.com's Fiscal Second Quarter 2021 Earnings Conference Call. Joining us today for today's call are Bill.com's CEO René Lacerte and CFO, John Rettig. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session [Operator Instructions]. With that, I would like to turn the call over to Karen Sansot for introductory remarks, Karen?

Thank you, operator. Welcome to Bill.com's fiscal second quarter 2021 earnings conference call. We issued our earnings press release a short time ago and furnished the related Form 8-K to the SEC. The press release can be found on the Investor Relations section of our website at investor.bill.com. With me on the call today is René Lacerte, Chairman, CEO and Founder of Bill.com and John Rettig, Executive Vice President and CFO. Before we begin, please remember that during the course of this call, we may make forward-looking statements about the operations and future results of Bill.com that involve many assumptions, risks and uncertainties. If any of these risks or uncertainties develop, or if any of the assumptions prove incorrect, actual results could differ materially from those expressed or implied by our forward-looking statements. For a discussion of the risk factors associated with our forward-looking statements, please refer to the text in the Company's press release issued today and to our periodic reports filed with the SEC, including our most recent annual report on Form 10-K and quarterly report on Form 10-Q filed with the SEC and available on the Investor Relations section of our website. We disclaim any obligation to update any forward-looking statements. On today's call, we will refer to both GAAP and non-GAAP financial measures. The non-revenue financial figures discussed today are non-GAAP, unless stated that the measure is a GAAP number. Please refer to today's press release for the reconciliation of GAAP to non-GAAP financial performance and additional disclosures regarding these measures. Now I'll turn the call over to René. René? René Lacerte: Thanks, Karen, and good afternoon, everyone. Thank you for joining us today. I hope that all of you and your families are in good health and doing well. In this uncertain time, we are…

Thanks, René. Today, I'll provide a brief overview of our fiscal second quarter 2021 financial results and discuss our financial outlook for the fiscal third quarter of 2021. As a quick reminder, today's discussion includes non-GAAP financial measures. Please refer to the tables in our earnings press release for a reconciliation from non-GAAP to the most directly comparable GAAP financial measure. With that background, let me turn to our financial results. Q2 results exceeded our expectations across all areas of the business, driven by strong execution from all teams and improving trends with our SMB customer base. Our platform is helping many businesses start their digital transformation and adapt to the new realities of a remote working environment. The initiatives we have to expand our platform's payment offerings, extend our reach with strategic partners, and build direct connections with network members are paying off, and we experienced strong growth in Q2 across all of our key financial and operating metrics. Total revenue for Q2 was $54 million, up 38% year-over-year as new and existing customers leveraged our platform for their financial operations. Core revenue, which represents subscription and transaction fees, was $52.3 million in Q2, up 59% year-over-year. This significant growth acceleration compared to the 53% year-over-year growth in core revenue last quarter was ahead of our expectations. To provide additional color on core revenue, subscription revenue in Q2 increased to $26.6 million, up 33% year-over-year. This growth was driven primarily by the increase in the number of customers on our platform. Transaction revenue increased to $25.7 million in Q2, up 98% year-over-year, driven primarily by higher average revenue per transaction, which increased 71% year-over-year as well as an increase in the number of transactions we processed in the quarter. Transaction revenue now represents 49% of our core revenue, up…

[Operator Instructions] Your first question is from the line of Darrin Peller from Wolfe Research.

Hey, thanks guys. Nice job. Okay, I just want to start off with, when I look at the actual transaction revenue, and I know you mentioned, obviously trends were strong on the volume side, but potentially yield also came in well, which, as you mentioned, underscored the success you're having in supplier enablement, as well as cross-border. So, if you can just give us a little more color on what's happening there? And what kind of progress has been made even over the last few months and what you expect in the next few to keep that going? That'd be great to hear. René Lacerte: Thanks, Darrin. We've made great progress on understanding the go-to-market with respect to the suppliers, both for the virtual card product we have as well as international payments and helping suppliers internationally, for example, choose to be paid in the local currency, but we're still learning. And there's lots of opportunity there. So what we've said in the long-term is that we believe virtual card penetration will be in the 5% to 10% range and that international payments will be in the 10% to 20% range. And we have no reason to say it's any different, we believe in the focus that we have.

No, that makes sense. But I mean, in terms of specifically, well, let's just hone in on cross-border. I mean, what kind of tools are you taking to enable that? If you can just give us a little more of an idea what steps are being taken? And how the response is from the end market from national suppliers internationally? Thanks again guys, I'll turn back to the queue. René Lacerte: Yes. There's a couple of components, right. There's first, getting our customers to know and use our product for their cross-border payments. So, we've done things inside the product. We've done marketing and product messaging. We've done sales techniques. All of these things, combined with some AI to kind of look at the most likely customers to do activity is something that we're focused on. When we look at the FX penetration, which is also an important part of that part of our business, we are also using similar capabilities across the Company to drive adoption of local currency payment by the suppliers. So, taking the control, so to speak, away from the payer and putting in the supplier's end. So lots for us to continue to do and to grow, but we feel like we have a good handle on all the things that are kind of the variables there, and we'll make progress as we move forward.

That's great, thanks a lot guys. René Lacerte: Thank you.

Your next question comes from the line of Samad Samana from Jefferies.

Good afternoon, thanks for taking my questions. Just absolutely great quarter. So maybe the first one for you, René. You talked about the different types of payment methods. And maybe just a follow-up. I'm curious if you're seeing a reaction to one versus the other being stronger, it sounded like it was fairly strong across the board. But when you think about virtual card versus real-time pay, how are customers evaluating that option? René Lacerte: Great question, Samad. We have -- one of the things that's really powerful about the business is that we work hard to make it to the suppliers and customers get to pay and get paid how they want to get paid. And what we've been able to learn across the rollout of our virtual card product is that suppliers that take credit cards, they are comfortable taking credit cards because they have already made that decision, they want to take more payments that way to simplify their reconciliation to accelerate their payment timing. So, those tend to be larger businesses in the supplier network. When we look at the real-time payments, it tends to be smaller businesses that may not rely on card on an everyday basis for collections. And we're able to kind of generate interest because if it was going to be a check, it would be later and even an ACH might be later. And so the opportunity to accelerate payments, we know is important. I think timing, especially if you think about the pandemic over the last nine months, timing has been critical for folks. And I think it will always be critical. So our ability to accelerate and help businesses pay and get paid in a short amount of time as possible is, I think, a core competency and something we'll continue to drive.

Great. And then, John, one for you. Net adds was quite strong. And despite that, you saw the average number of transactions actually continue to accelerate as far as growth goes. Is it fair to read through in that, that you're seeing larger customer success as well, just to maybe help partly explain that nice increase in the TPV per transaction despite having more transactions than anticipated?

Yes, Samad, good question. Yes, we were very pleased with the net adds for the quarter, it's ahead of our estimates given our dialog last quarter, in part driven by the strength from our accounting channel partnerships and interestingly, just higher retention across the board. Customers are sticking with the platform and using it more. So we think it's partially due to slightly larger customers having an impact. We've talked in the last couple of calls, a couple of quarters about additional efforts that we're putting behind mid-market customers. But at the same time, we just saw a much higher level of activity, payment activity across the board. And we think some of that is driven by call it, pent-up demand. We also saw a very strong exit rate in payment volume and payment activity in December. We always have seasonal strength, but this was in spade, something we hadn't seen before. So I think across the board, we benefited from that.

Great. I'll turn it over [indiscernible], but really nice to see the strong results through tough times.

Thank you.

Your next question is from the line of Brad Sills from BoA Securities.

Okay, great. Hey guys, thanks for taking my question and congrats on the nice quarter. I wanted to ask about the comments on moving upmarket. Obviously, some of these partnerships you would be targeting that next year customer up in the mid-market. Is there any limit on where you can go when you think about moving-up market, where is that next tier for you? And are there any limits to going even further north from there? René Lacerte: Thanks, Brad. And it's a great question. So one of the things that we've focus hard on is building a platform that scales from small businesses all the way up to mid-market is how we define that. When we think about the segment for mid-market, maybe just some data out there, the -- their labor statistics would have 20,000 businesses north of $100 million in revenue. So that's not what we're targeting. We're targeting businesses smaller than that, right. So when you ask a question around the limit, we think we've built a platform that really scales for businesses across the spectrum, no matter the industry, no matter the size, just not kind of those enterprise customers, if you will.

Got it. Great, thank you so much. And then back to the AI applicability. You've obviously seen some real success here with the supplier enablement, driving adoption of VCard. Can you elaborate a little bit on what that means for cross border? How are you applying AI to that business and driving adoption there? Thank you so much. René Lacerte: Yes. I think a lot of the AI capabilities we have go back to the source documents that we have in our platform. And you think about what we do in our platform is we enable all the documents that come in for a business and invoice the purchase order, all that information is coming in, and it's an opportunity to be able to scan that and understand information. So for example, with international payments, if the address of the supplier is international, well, then maybe we have a different product marketing or program or whatever to enable that supplier to be on our network. And so there's opportunities as some people internationally do include account information. So there's an opportunity for us to simplify the add of the banking account for suppliers. There's lots of ways for us to use that source document. In addition to the other way we use AI is just looking at the connections across our network. So lots of opportunity. We're glad we've been investing in that for a number of years, and we'll continue to invest in the AI platform.

Thanks so much. René. René Lacerte: Thank you, Brad.

Our next question comes from the line of Josh Beck from KeyBanc.

Thanks team for taking the question and glad to hear everyone's doing well. I wanted to ask just a little bit about the demand environment. Obviously, the work-from-home has created all sorts of scenes. And I think probably risen the awareness of this category. So I don't know if you could maybe just qualitatively speak to things like pipeline, sales cycles and close rates that you're seeing now maybe versus, say, six to nine months ago? And maybe how you expect that to evolve as we go through the year? René Lacerte: I think one of the things that we've seen with COVID is really just -- the applicability of our platform does make a difference, right? It makes it a lot easier to kind of manage your business from anywhere. And so John already referenced in part that we've seen better retention, especially in the early cohorts as a result of a number of things that we're working on, but we also can't discount that the environment and the awareness is actually higher. So in general, I would say that we expect the awareness and the switch, so to speak, for people to actually ask the question, can I run my business from anywhere? Like that's going to be there going forward for all time, and it wasn't there a year ago. And I think that's going to help us continue to create adoption opportunities and awareness opportunities across the SMB landscape.

Okay. Really helpful. And then on the supplier enablement front, I know you've had a nice partnership there with companies like Comdata. I'm just kind of curious, maybe, have you been able to close the gap maybe on a lot of the potential overlap between your customer base and maybe theirs? And is that another area where you may be looking to add partners kind of like what we've seen with cross-border? René Lacerte: Yes. Virtual card is a really important part of the business for us. And so when we look at the ways to extend that, one of the things we have done, for example, is we did virtual card first with Comdata for our direct customers. But we do have virtual card with JPMorgan Chase. We have virtual card with our American Express partnerships. And I think as we move and scale the business over time, we will look to continue to add ways to leverage virtual card capabilities of our existing partners, and there's opportunities with others as well. So, I think there's just a lot of opportunity for us to continue to focus on what it is that suppliers want. And if they want a payment via the card networks, we want to be able to provide that.

Really helpful. thanks René. René Lacerte: Thanks Josh.

Your next question comes from the line of Brent Bracelin from Piper Sandler.

Thank you and good afternoon, guys. René, one for you and a follow-up for John. I wanted to go back to cross-border payments. I mean clearly, the interest in this product is stronger than you anticipated. You're adding now Citibank, a second partner. My question is, what's resonating? What's the pain point? Is it just a lower cost? Is it more flexibility? Just drill down into what is resonating most around the cross-border payment solution that you have today that wasn't being addressed for those SMB customers today. And then got a quick follow-up for John. René Lacerte: Sure. Thank you, Brent. So the breadth of the platform ultimately is what's resonating. That would be that -- my high-level answer is the ability to be able to track all of your payments, the approvals and execute a payment all in one place makes it a lot easier. And so if you weren't using us for international payment to go to another system, to find out from the supplier what their bank information is. And if you haven't had a chance to enter a wire internationally, it is quite complicated. A number of different accounts you have to do. And the person who knows that best is the supplier, probably, not the buyer. And so I think the breadth of the platform, the fact that we have a network that lets people enter that information directly, the fact that we have a platform that lets businesses be able to pay from anywhere in the world. So if you're in the pandemic situation and you want to be able to pay your bills from anywhere, you can do that from your phone now. You don't have to go into separate experience to create that wire. So, I would go back to just the breadth of the platform, the simplicity needs of use that we have connecting all the pieces, is what makes it a real opportunity for SMBs to simplify their lives and to get back to doing what they do best.

Got it. So it's back to just the core value prop here of just reducing friction in the system. And then, John, I guess, for you, on payment volume growth, we're back to kind of pre-pandemic levels of 40%. You did talk about some December seasonality. My question is, are we back to pre-pandemic levels, or again, too early to tell given the seasonal lift you saw in December?

Yes, thanks Brent. It's a great question because we saw activity levels that were way ahead of what we had seen previously, just from a seasonal uptick perspective. And it suggests to us that businesses are more than back to business. But it seems premature to declare the impact of the pandemic over, given how early we are with the economic situation, with vaccine rollout and all sorts of things. So, there's certainly some unknowns there. But we were really encouraged by the level of activity, the level of retention and whatnot, given the sort of elevated activity that we saw in the second quarter, particularly in December. We would expect our typical seasonal patterns to continue where the third quarter is usually down a bit in terms of payment volume, again, seasonal reasons more than anything else. But we're watching it closely and hoping to see more signs of this level of activity going forward.

Good to hear. Thank you.

Your next question is from the line of Bob Napoli from William Blair.

Thank you. Good evening. René and John. Great quarter, very great to see. A question on the platform, René. I mean you talked a lot about the breadth of the platform, you're adding bill payments. What else -- and obviously spending a lot in R&D. What are you looking to add to the platform over the next few years? Are there items in the treasury area you're looking to add? I know your supplier financing is something that you've talked about in the past. And then with the super strong balance sheet, is there anything you're looking at to maybe tuck-in that you can cross-sell that fits with your client base? René Lacerte: There's a -- good to talk to you, Bob. There's a number of things that, when I think about financial operations and how much opportunity there is to simplify and automate the financial operations and proxies that businesses have, there's a number of things. I mean one example that we've been investing in recently is obviously the payment rails. And for example, adding the real-time payments capability into a product that we call Instant Payments. And with that, using The Clearing House, for example, that only gets us to around 50% of the bank accounts in this country that actually leverage or have access to The Clearing House through real-time payments. So one of the things that we're investing in right now is adding debit rails. And when we add debit rails, that will get us to all business accounts will have the ability to accept the real-time payment if they want that. And we're going to do that with an integration through Stripe. So that's an example of something that I would say over the coming quarters that we're working on. In the long term, when you reference kind of the balance sheet, there's just a number of areas that we think are interesting from financial operations. Like I said, this has been my kind of life's passion around the software companies that I've started is to really simplify this operation. And so we would look to simplify anything from HR to payroll to expense management, to spend management to AR. There's lots of opportunities that are somewhat adjacent. And then as you referenced, there's things that are -- even further appeal from that, that we would consider over time. So I think I would expect us to continue to evaluate all the best ways to integrate those types of products into our platform whether it's through partnerships, doing it ourselves or through potential M&A activity.

Thank you. And then a quick follow-up just on the bank channel. With the three major banks that you've signed up or -- I know it takes a while to get the integrations and the partnerships rolling, but how are you feeling about those partnerships and over what time frame would you expect that to gain momentum? René Lacerte: One of the things from the pandemic has been, and I think I've referenced on the last call, that our partners, in particular, are very committed to solving this pain point for their customers. They understand that it's not a good thing that their businesses have to operate in an office with filing cabinets and paper checks. That's 90% of SMBs still use paper checks as a primary form of payment. So they understand that. And that commitment that has come out of, I would say, the pandemic is real. And so when we look at the partnerships, across our platform, whether it's the financial platforms that we integrate with, the banks that we integrate with or our accounting software partners, we see a commitment there that is real, and we expect it will continue to grow over time. So, nothing to say per se on exactly right now, just the strength is there, and we expect it will continue to grow.

Thank you. I appreciate it. René Lacerte: Thank you.

Your next question comes from the line of Scott Berg from Needham.

Hi René and John, congrats on a good question -- quarter and thanks for taking my questions. I guess I got two quick ones. René, on the Wells partnership, obviously, it just started in the fourth quarter, and it's going to ramp from here on out. But from what you've seen already to date, is there any reason to believe that the ramp and maybe customer acquisition through that channel will be any different than what you've seen in some of your other partnerships with maybe Bank of America or JPMorgan Chase? René Lacerte: The -- so as a reminder, the partnership with Wells is with the commercial customers. And so when I look across our Board at the commercial partnerships that we have with JPMorgan Chase or Bank of America, we don't see any reason to think that anything is going to be different across all of them. If you were to ask me that question three years ago, the answer might be different. But like I just mentioned, the commitment that all of our partners have to making this a solution for their customers continues to grow on a -- daily might be a dramatic statement, but it continues to grow and as we have the ability to serve their customers with better products and better solutions. So I would say it's a great opportunity in front of us.

Got it. And then last question for me is, John, you talked about the transaction revenue per customer increasing, and we're certainly seeing the shift to other products. But I think it's interesting, at least the way I calculate it, the shift has been most notable since the arrival of the pandemic. I guess as you look at your customer base, do you see them doing anything specifically different that's maybe in relation to, I don't know, the work-at-home trend, et cetera, that might be driving some of that shift?

Yes. Thanks, Scott. I mean we do see a sense of urgency from customers. We talked in prior quarters that, that's translated into a slightly higher close rate and faster time to adding users and performing transactions on the platform compared to pre-pandemic times. And obviously, as we continue to roll out more payment products, whether it's cross-border or virtual cards or Instant Transfers or real-time payments, as René talked a minute ago, it's giving more choice to customers, and they're taking advantage of that. For us, our business model is such that we have both fixed-fee transactions where we built the business, checks and ACH, and then these newer payment methods that are variable-priced. And as customers increase adoption of those products because maybe they're managing cash flows a little bit more closely now in the pandemic than they were earlier, it's having a positive sort of impact tailwind on our financial results as well. So I mean, it's pretty amazing, the resiliency of the small business customer base that we serve. And it's pretty exciting because it's -- we're still so early in penetrating the market, and there's a long way to go.

Thanks a lot and thanks for taking my questions.

Your next question comes from the line of Matt VanVliet from BTIG.

Hi, thanks for taking my questions, guys and congrats on the quarter. I guess thinking about those bigger partnerships, they seem to be ramping very well, and your commentary is certainly positive around that. As we think about kind of what the capabilities are long term for growth expansion at the three major ones you mentioned and as you look to extend out to other institutions, how much opportunity do you feel like is in some new partnerships as well as kind of a wallet share perspective? And what you're currently kind of going after at the bigger ones versus what you could potentially go after long term? René Lacerte: Yes. The -- thank you, Matt. The -- one of the things I've worked hard on over the last now 15 years is building a broad distribution strategy approach. And so having the ability to serve customers through a direct channel, through accountants, through accountant software partners and through financial institutions, all of that is super important, and they all help each other grow. There's awareness that's created by all of those channels that helps each of the other ones do a little bit better. And so when I look at the potential of the FI channel, the banks that we have on deck right now that are partnered with us have a tremendous amount of opportunity just with us focusing on those. And like we've mentioned, one of the top 3 has made a commitment and is in development with us to roll out in the second half of '21 something for their SMB customers. And so that focus will, again, create more awareness because it's a broader customer base than what we've seen in the past with the commercial customers. So when asked, like what's the potential? We have a lot of hope and faith and belief across all the channels that we serve and all the distribution approaches that we address.

Great. That's helpful. And then I guess just as a follow-up, thinking about how the tax season in general has shifted back to its normal seasonality in April rather than last year's extended term. Do you expect there to be any major impact over the next two quarters on kind of an individual basis? Or given that, that's primarily in the fourth quarter, either way, that it shouldn't have too much impact? René Lacerte: Yes. I think -- there is some seasonality that we have in general across the year. And I would say last year's seasonality, the pandemic impacted that. So, I would turn to John to kind of reference if there's any seasonality once we go back to normal that's worth calling out.

Yes. And just the emphasis on the tax season, I think, becomes somewhat distracting for accounting firms and -- who have a tax practice, and we certainly see some of that in the fiscal third quarter or current quarter, and maybe a bit more in the fourth quarter. So it spans kind of late February into early May, that time period. So there's certainly -- we haven't seen anything yet to suggest anything different than our typical seasonal patterns, but there's definitely some impact. For us, the fact that we have the broad distribution strategy in different channels to rely on if that impact is probably a little bit muted.

Great, thank you.

Your next question comes from the line of Chris Merwin from Goldman Sachs.

All right, thanks for taking my question. I wanted to come back to real-time payments and your Instant Transfer product. Just hoping to dive a little bit further into how that's doing so far. And I remember with virtual card, when that started to ramp, it was almost maybe a year plus into the rollout of it that we saw more of the inflection there. With all you're doing on supplier enablement now, curious how we should think about a similar ramp in Instant Transfer. Should that -- I imagine that would look a lot quicker. But if you could just put a finer point on it, it would be much appreciated. Thank you. René Lacerte: Thank you, Chris. Yes, the Instant Transfer product, for us, I would say, is kind of in the -- still in the pilot phase as we understand what the right pricing, what the right go-to-market, the right product placement. All those things, we're still determining and fine tuning. And in addition, like I referenced, right now, only around 50% of the bank accounts out there accept an Instant Transfer from The Clearing House, the real-time payment network. And so as we extend and have the debit rail capability, we'll be able to invest more into the marketing, the sales, the AI, all the approach that we've used for supplier enablement for cross-border payments, we'll be able to invest in that type of marketing and activities -- sales activities to grow that business. So we believe it's going to be super important when it comes to the type of customer and the size of customers. So what I referenced before is that we expect Instant Transfer to be something that the smaller businesses that are on the network, that are in the 2.5 million, that may not use card every day for acceptance but may want to have a faster payment. This is going to be the profit for them. This is going to be better than a check and better than an ACH as well. And so this is going to be a way for them to accelerate their cash flow. And I think it's just going to -- like all things, it takes time to learn how to execute and reach that customer, that segment. But we believe that we're building all the right tools in the platform to make it so.

Okay. Great. And then just a follow-up for John. Are you able to update us on what percent of payments are digital now in the platform?

Yes. I think Chris, the last number that we disclosed was 60% electronic payments. And we continue to make progress on that, and it continues to move higher. It's not materially different. And I think our plan is to update that stat on an annual basis. We did some interim reporting as a result of the pandemic. But we have seen good adoption. It's obviously helped by the fact that we keep introducing more payment methods that are electronic. So we have more choices to move away from check payments. So we're continuing to see positive trends there.

All right, great. thanks very much.

Your next question comes from the line of Brian Schwartz from Oppenheimer.

Yes, hi, thanks for taking my questions this afternoon and Just one for René and a follow-up for John. René, just a question on the customer acquisition, a lot of commentary on it. Is it fair to assume that the business saw meaningful change in the velocity of signing up just larger-sized customers this quarter than the business has been seeing in recent quarters? René Lacerte: Thanks, Brian. We had saw -- like John referenced, we saw really good adoption across all of our channels and all sizes of our customers. Our focus and ability to understand how to reach the mid-market customers continues to grow. As a reminder, mid-market customers came -- we started that folks because they've already come to us and on the platform, right? So when we look at the distribution across, we definitely saw a strong retention, which that definitely helps the net customer adds when you don't have any -- don't have as much of the attrition that we might have had a year before. So nothing specific to say, other than it continues to be strong and to build, and we get better and better at understanding how to serve the customers on a quarterly basis.

And then the follow-up question for John. Just the comments about the retention. Clearly, you've done a really good job getting increased usage from the installed base on that dollar retention. Is there anything that you can maybe just share either just qualitatively, if not quantitatively, on what you saw on the gross retention side? Is it fair to assume that you also saw improvements on that metric compared to recent quarters? Thanks.

Yes. Thanks, Brian. That's right. So my comments on the prepared remarks were really directed at the gross retention and how we're seeing customer behavior. We continue to have strong dollar-based net revenue retention that's consistent with recent quarters. But we have seen a slight increase in the annual customer retention rate that we referred to. I think the last number that we reported officially was 82%, and we continue to see improvements there. Which in this pandemic period when there's so much uncertainty, I think, for us, that's really encouraging to see customers engaging with the platform and sticking with it. And taking advantage of the fact that they can really run their business from anywhere, at least their financial operations.

Thank you for that additional color John and great job on the business performance this quarter.

Your next question comes from the line of Tim Willi from Wells Fargo.

Thanks. Thanks, and good afternoon, Tom and René. One quick question, just sort of thinking about the wealth management initiative that you've talked about now for a couple of quarters. Any -- I guess anything unique about the go-to-market there, the product delivery, the sort of the servicing and onboarding, just out of curiosity that you -- and how you think about the ramp-up of that channel? It obviously makes a lot of sense. Just sort of curious if there's nuances to that versus the other channels that you're sort of working through and trying to make sure you're ready to deliver on. René Lacerte: Yes. Thanks, Tim, for the question. It's -- like many of the things that we've done at our -- for entry into the wealth management market is because they were already on our platform. Many of them are on the platform from the accountant focus that we have. Some accountants actually obviously focus on the consumer side with taxes, and sometimes that leads them into helping their clients manage their net worth. And so this expansion into the wealth management space really is because the breadth of the platform and because we build something from the ground up to be able to serve the small businesses that we have, all the way up to the larger businesses across multiple distribution channels. And so things that we had to do to kind of help bring and make it so that we felt comfortable marketing and selling into the wealth management were things around security and the audit capabilities that we already had, but just kind of packaging that so they understood that they were going to get something that was going to meet the needs of their clients, which obviously is important. So I think from a go-to-market, it's going to be, continue to do what we already know how to do, which is to leverage, if you will, aggregators, like accountants, people that are trusted. Help them at all their clients. The fact that we have this ability for one -- Console that we call it, to be able to manage lots of different clients on your platform to divvy up that work across your employees at the wealth management firm, that's a significant opportunity for us to continue to sell those capabilities with the same types of programs that we've done for accounts. So I expect that we'll get better at that each quarter as well.

Great. That's all I had. All the other questions were answered for me. Thanks so much. René Lacerte: Thank you, Tim.

Your next question comes from the line of Jeff Cantwell from Guggenheim Securities.

Hey, thanks guys. Appreciate squeezing me in and nice results here, congrats. I had a very quick question. To what extent is cross-border supplier enablement a precursor to international expansion? And the reason I ask is because the thinking is that it would help to launch the product internationally because the suppliers that you're enabling could eventually become customers, right? I'm just curious if you could talk about that a little bit. René Lacerte: Yes. Thank you, Jeff. It's definitely part of how we think about our strategy for going international. There's a lot of things that would be important for us to understand before making that leap. But one of them would be understanding how customers use the platform that we have today. So getting suppliers that are being paid by US companies to engage and choose their local currency as a payment, being able to manage that interaction, if you will, that will allow us to learn which corridors are important for US businesses, where do we develop density, where do we see the activity, what's the payment volume like between the quarters. All those things will help us understand a good foundation for building a go-to-market strategy for international growth.

Great, thanks so much. René Lacerte: Thank you, Jeff.

We have time for one last question, Ken Suchoski from Autonomous Research. Your line is open.

Hi, John. René. Good afternoon and hope you're well. Thanks for a squeezing me in here. I just -- a lot of my questions were asked already, but I wanted to ask about the subscription revenue per customer. It improved quarter-over-quarter versus sort of the quarter-over-quarter declines the last couple of quarters. So how should we think about that metric trending over time? I mean how much of that increase is driven by going up market versus some of the simple build pay customers dropping off.

Yes. Thanks, Ken. I mean there's a couple of dynamics at play there. One, you touched on with the slightly larger customers that we're having success with and seeing demand from. They typically have more users and are often in a higher price point in terms of the cost per user based on the ERP system or accounting system that they use. I think that's partially offset these days with slightly fewer users per customer. Not significant, but nevertheless something that we've noted during the pandemic. And so it's a little bit below pre-pandemic time, so that softens it a little bit. Subscription revenues last year were certainly supported by higher customer numbers and users and the price increase that we implemented. And that's -- we don't have any price action this year so you've seen some slight deceleration in the growth associated with subscription revenues. And we would expect that to likely continue in the next few quarters. And then I think the dynamics change a bit once our -- some of our newer financial institution partners start to come on line over the next few quarters.

Really helpful. And if I can just ask as my follow-up, I think you mentioned in the past that most of the increase in virtual card penetration historically has come from converting check payments over to virtual card. So have you started converting ACH transactions over to virtual cards as well? And if so, how much is that additional ACH opportunity adding to the increase in transaction revenue and take rate?

Yes. It's -- you're right. We've done both. We certainly started with checks, and that continues to be, I think, the larger opportunity just given how inefficient checks are for everyone involved, whether it's the paying customer, the buyer, the supplier and the financial institution who's doing the clearing and so on and so forth. So, I think that's where we see the most traction, and that's where most of our effort has gone to date. We have started some initiatives to support transitioning ACH payments to virtual card, and we've seen some success there. But I'd say that's not the big driver of our results currently. Over the longer term, as we bring suppliers on board and give them more choices and more control about how they're going to get paid, as René referenced earlier, I think that presents an opportunity as well.

Makes sense. Thanks, John. Thanks, René. René Lacerte: Thank you.

Thank you. I will now turn the call back over to René Lacerte for closing remarks. René Lacerte: Okay, thank you. Thanks, everyone, for joining today's call, and we appreciate your support. Take care.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.