Technology Holdings third quarter 2023 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touchtone phone. To withdraw from the question queue, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Chris Kettmann. Please go ahead. Good morning, and thank you for joining us. With me today are Tom Priore, Chairman and Chief Executive Officer of Priority Technology Holdings, and Tim O'Leary, Chief Financial Officer. Before we give our prepared remarks, I would like to remind all participants that our comments today will include forward-looking statements, which involve a number of risks and uncertainties that may cause actual results to differ materially from our forward-looking statements. The company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events, or otherwise. We provide a detailed discussion of the various risk factors in our SEC filings, and we encourage you to review these filings. Additionally, we may refer to non-GAAP measures, including, but not limited to, EBITDA and adjusted EBITDA during the call. Reconciliations of our non-GAAP performance and liquidity measures to the appropriate GAAP measures can be found in our press release and SEC filings available in the Investors section of our website. With that, I would like to turn the call over to our chairman and CEO, Tom Priore. Thank you, Chris, and thanks to everyone for joining us for our third quarter 2023 earnings call. I'd like to start today by discussing some of the trends we're currently seeing in the business and then provide an update on important developments at Priority, including the successful integration process of our August acquisition of Plastiq. Consistent with what we saw in the first half of the year, during the third quarter, we continued to execute in all three segments of our business, delivering strong results in SMB acquiring, B2B, and enterprise payments. We remain committed to our unified commerce vision of combining payments and banking on a single platform, accelerated by the strength of our diverse business lines that were positioned to benefit from higher interest rates and the current macroeconomic environment. Total accounts operating on our commerce platform now exceed 820,000, processing over $118 billion in transaction volume on a last twelve-month basis, while administering in excess of $850 million in average daily deposits. We're excited about our 2023 progress to date and working hard to close out the year strongly and position ourselves to accelerate in 2024. As you saw in our announcement earlier today, we maintained our positive momentum with strong financial results in the third quarter. Our Q3 revenue of $189 million increased 14% from the prior year. This led to a 23.6% increase in adjusted gross profit to $72.3 million and a 28% improvement in adjusted EBITDA to $45 million. Adjusted gross profit margin of 38.3% increased 310 basis points from the prior year quarter, highlighting the strong operating leverage of our purpose-built platform. On a year-to-date basis, revenue increased 14.4% to $556.3 million, leading to a 22% gain in adjusted gross profit to $202.4 million. Now, combined with a 230 basis point increase in adjusted gross profit margin in the first nine months of 2023 to 36.4%, we generated a 23% increase in adjusted EBITDA thus far in 2023. As you can see from our published guidance this morning, we expect to end the year strong as current growth and margin trends in our business channels continue. As a result, we projected to deliver full-year revenue of between $755-$765 million, an increase of approximately 15% over 2022. But more importantly, we're increasing our full-year adjusted EBITDA guidance from our previously estimated $160 million-$165 million range to $167 million-$170 million, a 20%+ increase over 2022. Our confidence reflects the value our customers see in our product and technology offering, the strength of our diverse sales channel performance, and the efficiency of our operating teams that continue to deliver. A notable example contributing to our outlook is accelerating operating trends in the Plastiq B2B channel. Since closing on August first, our teams went to work synergizing operations and embracing revenue growth initiatives that mitigated drag on EBITDA from the acquisition and demonstrated once again that we're uniquely built to systematically absorb and operate software and payment assets to quickly drive profits. Now, for those of you who are new to Priority, slide 6 highlights the architecture of our proprietary unified commerce platform that combines robust payments and banking functionality to monetize the merchant and partner networks we serve. Our growing customer base, combined with current uncertain market conditions, continue to reinforce our belief that systems combining features of both payments and banking to accelerate cash flow and distribute funds in multiparty environments will be critical as businesses put greater demands on software and payment solution providers. We're committed to meeting our customers' expectations by refining the experience of our partners to make working with Priority seamless and simple. Our performance illustrates that partners consistently choose the unified commerce applications in SMB, B2B, and enterprise payment segments that best fit their business, adopt the Passport financial tools that fit their needs, and are moving their money with Priority. We're laser-focused on the continued innovation of our SaaS payment suite of services and Passport Commerce Engine, and eager to meet the evolving needs of our growing portfolio of customers. At this point, I'd like to hand it over to Tim, who will provide further insight into our segment-level performance during the quarter, along with current trends in each that factored into our guidance for the full year. Thank you, Tom, and good morning, everyone. As I review the third quarter financial results, including the segment-level contribution to the consolidated results, please refer to the supplemental slides or the MD&A for further details. Our MD&A is included in the Form 10-Q that was filed with the SEC this morning and provides a discussion of our comparative third quarter and year-to-date results. A link to that filing can also be found on our website. As Tom mentioned, we had strong financial performance across the business in the third quarter and for the first nine months of the year. Starting with the SMB segment on Slide 8, SMB generated Q3 revenue of $140.1 million, which was a $0.2 million increase over the prior year's third quarter. As discussed on our last earnings call, one of our larger reseller partners started to diversify their activity, and we said at the time that we expected their diversification strategy to continue throughout 2023, which we continue to believe is the case. If you look at the year-over-year impact of that shift on the Q3 results, it was a $15 million headwind to revenue in the quarter. If you were to exclude that impact, the SMB business would have had over 13% revenue growth on a normalized basis, which demonstrates that we continue to see strong results in the balance of the business. Bank card dollar volumes in SMB were $14.2 billion in the quarter, which is down 6% from $15.1 billion in the prior year. But again, the impact from the large reseller was the primary contributor to the decline, as it more than offset year-over-year growth in the remainder of the segment. From a merchant standpoint, we averaged just under 240,000 accounts during the quarter, which is 5% lower than the 252,000 average in Q3 of 2022. But if you exclude the impact of the large reseller, the average grew by over 5,000 accounts on a year-over-year comparative basis. For the quarter, new monthly merchant boards averaged 4,000, compared to an average of 5,000 per month in the third quarter of 2022. Adjusted gross profit in SMB for the quarter was down by $1.3 million, or 4%, to $34.2 million compared to last year. The decline in comparative quarterly gross profit was partially impacted by the lower volumes in revenue from the large reseller, but as we stated in the past, that relationship generates lower margins for Priority, so the related quarterly reduction in gross profit was under $1 million. The quarter was impacted more by a $2.3 million billing adjustment in Q3 of last year that provided for a tough year-over-year comparison in this year's third quarter. If you exclude those two items, adjusted gross profit on an unaffected basis would have increased by approximately $2 million in the quarter, which again demonstrates strong growth in the balance of the portfolio. Gross margins of 24.4% are down slightly from 25.4% in Q3 of last year. But if you exclude the impact of the billing adjustment in Q3 of 2022, gross margins in the core business improved by 30 basis points due to the favorable mix of revenues, resulting from the combination of strong growth in the core acquiring business and a decline in the large but low-margin reseller. Lastly, for SMB, quarterly operating income of $11.8 million represents a $1.7 million or 13% decline from $13.5 million in the prior year's third quarter. Operating income was negatively impacted by the factors already discussed in gross profit. Moving to B2B payments, revenue of $13.8 million was an increase of $8.9 million, or 182%, from the prior year. The acquisition of Plastiq, which closed on July 31st, contributed $10 million of the increase during the quarter, but that was partially offset by the final wind down of the managed services business. As previously discussed, we expected to see a year-over-year impact from managed services in Q3, but that comparative headwind will go away in Q4. In looking separately at CPX, that business grew by $1.2 million, or 47%, in Q3 compared to last year's third quarter. Adjusted gross profit in B2B increased to $5 million as a result of the Plastiq acquisition, combined with 60% growth in gross profit for the CPX business, which was also partially offset by the managed services wind down. For the quarter, gross margins were 36.2%, compared to 61.2% last year, but that decline is fully attributable to the Plastiq acquisition, including the impact of the GAAP reporting requirements for the Plastiq business compared to the balance of the B2B segment. Gross margins for CPX continued to improve and were almost 85% for the quarter. The B2B segment produced $0.1 million of operating income during the quarter, which was down $0.1 million compared to last year, due to the previously discussed operating losses of Plastiq and wind down of managed services. Moving to the enterprise segment on the next page. Q3 revenue of $35.1 million was an increase of $13.5 million, or 63%, from $21.6 million in Q3 of 2022. I'll sound like a broken record on this, but the favorable trends from the past several quarters in new monthly enrollments, an increase in the number of billed clients, growth in deposit balances, and the higher interest rate environment have all continued to contribute to strong revenue growth. That strong revenue growth then flows through the P&L at a high conversion rate, which resulted in adjusted gross profit for the enterprise segment increasing by 66% to $33.1 million, while adjusted gross profit margins improved to just over 94%. Operating income was $21.3 million for the quarter in the enterprise segment. Moving on to consolidated operating expenses on Slide 11. Salaries and benefits of $20.1 million increased 23% from Q3 of last year, but that was only $1 million higher sequentially than during Q2 of this year, as we continue to maintain our expense discipline after investing in the business and team during 2022. Compared to the Q2 levels, the $1 million sequential increase was almost entirely attributable to the acquisition of Plastiq on July 31. We finished the quarter with approximately 990 employees, including 370 in our India Development Center, which is compared to approximately 875 at the end of Q3 in 2022. SG&A of $11.4 million increased by $1.2 million, or 12%, from $10.2 million in Q3 2022, and $0.6 million sequentially from $10.8 million in Q2 of this year. The year-over-year increase was due to certain non-recurring items, including transaction-related expenses for the Plastiq acquisition. Depreciation and amortization of $17.3 million for the quarter decreased modestly from the comparable quarter last year and from Q2 of this year. Moving to the next slide. Adjusted EBITDA for the quarter was $45 million, which was an increase of 28% from $35.1 million in Q3 2022. Interest expense of $20 million for the quarter increased $6.6 million from Q3 2022 levels as a result of acquisition-related debt increases in the quarter, combined with the impact of the higher interest rate environment. For those that have joined our prior calls, you likely remember that we have a natural hedge in place for the floating rate debt, given the interest income we generate in our deposits. At the end of Q3, that natural hedge covered over 130% of the debt and just under 100% of the floating rate liabilities, if you also include the preferred stock. Moving to the capital structure and liquidity slide on page 13. Debt levels increased during the quarter to $639.1 million, which was driven by the acquisition of Plastiq on July thirty-first and the related borrowings on the revolver at that time. Net debt of $614.5 million was higher by $19.4 million compared to the balance at the end of Q2 for the same reason. From a liquidity standpoint, we ended the quarter with $32 million of borrowing capacity available under our $65 million revolving credit facility and $24.6 million of unrestricted cash on the balance sheet. Subsequent to quarter end, we raised an incremental $50 million of term loan borrowings. That transaction was neutral on a net leverage basis, with proceeds being used to repay the quarter end revolver borrowings in full and put additional cash on the balance sheet. For the LTM period ended September 30, Adjusted EBITDA of $163.5 million represents approximately $7 million of sequential quarterly growth from $153.6 million at the end of Q2. Preferred stock on our balance sheet totaled $252.9 million at September 30 and is net of $17.8 million of unaccreted discounts and issuance costs. The third quarter preferred dividend of $11.4 million consists of $6.8 million paid in cash and $4.5 million of a PIK component. This is supplemented on our income statement with the accretion of discounts and issuance costs of just over $800,000. Before turning the call back over to Tom, I wanted to discuss the revised revenue and adjusted EBITDA guidance for the full year. Based on the combination of year-to-date results and our latest expectations for the fourth quarter of 2023, we are reducing our full-year revenue guidance to a range of $755 million-$765 million, but we are simultaneously increasing our adjusted EBITDA guidance to a range of $167 million-$170 million for the full year. The revised guidance reflects the revenue impact that we've already discussed related to the diversification strategy being employed by one of our large, lower-margin resellers. But it also importantly reflects the continued strong performance that we expect in our higher-margin operating segments. I'll state the obvious from a math standpoint, but this is the first quarter where the combined gross profit from our higher-growth and higher-margin B2B and enterprise segments totals more than the gross profit of the SMB segment. Simply put, our business and the related mix of profit pools has evolved, and not all revenue is created equal. So we will continue to invest our capital, both human and financial, in products and markets that we believe will create significant shareholder value.... With that, I'll now turn the call back over to Tom for his closing comments. Thank you, Tim. As we conclude our third quarter review, I want to take a moment to reflect on the execution of our vision for unified commerce and the multi-year planning and work that underpins our consistently strong performance. For those of you who have participated on these calls in the past few years, and certainly if you work at Priority, you've likely heard me share my belief that the decisions of the past are the architects of our present. I would like to offer a brief reminder of a handful of the decisions that we emphasize to investors. In 2020, amidst the height of the pandemic, we noted that, and I'm quoting, "We have and will continue to target growth in countercyclical assets, where businesses look for revenue in down markets and cash acceleration has more value. We are managing our business several quarters ahead by building a platform to maintain stability and growth through varying business cycles. That is a one-stop shop for companies looking to monetize payments in acquiring and issuing, without the headaches of managing payment operations, client service risk, underwriting, and compliance. Then again, following the acquisition of our banking-as-a-service assets in 2021, we stated that 2021 would be regarded as Priority's year of transformation, when we realize our emergence as a payments powerhouse with a meticulously curated platform to collect, store, and send money that would deliver differentiated products to our business channels. As the economic downturn unfolded in 2022, what we had anticipated and planned for became a reality. Our strategy to remain lean and position our innovative, agile technology to leverage the combination of traditional and countercyclical assets performed as expected, delivering nearly 29% top line and 45% bottom line growth. Our foresight allowed us to continue to accelerate our initiatives in new revenue channels that are early in the conversion to embedded finance and unified commerce solutions that positioned us to benefit from higher interest rates and the inflationary environment. Now, I highlight these decisions of the past because I would submit that, first, it's time that Priority be recognized as an organization that operates with superior vision and is built to last. And second, that we're delivering on the promise of unified commerce with clear and sustainable financial performance, as evidenced in our quarterly results throughout tumultuous economic environments like the pandemic and today. Last, that we've invested thoughtfully in technology and built scalable operations and financial resources that will continue to outperform as market demands evolve. Simply put, regardless of investment disclaimers that say otherwise, past performance is a predictor of future results. In closing, I want to share a short anecdote that I believe is informative of the culture at Priority. We have a tradition each Monday for one of our now 990 team members to share a reflection, what we call a Monday morning motivation, and they'd share it with the entire company. Last week's submission came from one of our UI/UX designers, Jahumbi, that speaks to who we are as an organization. She shared, "We honor the dream by doing the work." Priority is on a mission to change how businesses of all types and sizes think about the movement of money and their expectations for cash acceleration, reconciliation, and simplicity from their payment and banking partners. Our entire team is dedicated to our mission and honors our goals each day by doing the work. I want to say thank you to our dedicated team at Priority for delivering again this quarter and throughout 2023. And thank you to our investors and analysts for your ongoing support. Operator, we'd now like to open the call for questions. We will now begin the question-and-answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the key. To withdraw from the question queue, please press star then two. The first question is from Michael Perito of KBW. Please go ahead. Hey, guys. Thanks for having me on the call and taking my questions. Absolutely. I wanted to start. So I was out in Las Vegas a couple weeks ago for Money 20/20, and I felt like there was a lot of, ... a lot of conversations around kind of margins and pricing in the payment space, you know, B2B enterprise, SM, merchant acquirer, you kind of name it. And I was just wondering maybe if you guys could provide some context around kind of how the pricing dynamics in your business are trending and how the unified commerce approach has maybe helped insulate you guys a little bit from some of the pressures that you know, some of your peers are clearly seeing and speaking to. Yeah, sure. Michael, you know, by the way, great, great question, and, like, this is the, you know, this is, this is what unified commerce is designed to address, right? At the end of the day, customers of all sizes, whether you want to talk about the SMB market or, looking upmarket to, you know, kind of more middle market and, and even enterprise customers, there's, there's a wallet share, if you will, right? And, you know, what we've been very successful at, I'll think about it, if from a reseller's standpoint, what they're recognizing at Priority is that payments is about more than card acceptance. It's about, certainly part of it, card acceptance or, you know, I'll call it digital revenue acceptance, whether it's card, ACH, right? But I want to reposition that money to actually help my business grow, and Priority gives you all the tools to do that because when you get a while we're doing that AR work, it makes its way into a routable FDIC-insured bank account, where you could use that money quickly to pay vendors through virtual card, or you can use that using plastic with your existing credit to maybe capture early pay discounts and pay vendors who won't accept card, but get a benefit nonetheless because you have a cashback card, and you're generating an early pay discount, and the funds can get resolved to, you know, your payee the way they want them. So, you know, those are the types of elements we're bringing into a, you know, a seamless experience across our channels, that just make doing business with Priority a better revenue proposition. Not just for the customer, but also for our reselling channels that are the beneficiaries of, one, a more loyal customer, which is why our attrition is so low, and two, additional sources of, you know, really just earnings from services being provided. That's why, you know, when you look at the composition, and I think Tim alluded to this, of our gross profit, you know, more than 50% of it now is coming from services unrelated to, I'll call it, transaction volume. That's helpful. Yeah, I mean, it's an interesting time, and I think it's a good time to kind of have a, you know, a different approach to growing, especially outside transactional volumes. I guess if we try to kind of bridge that to some of the financials, I know you guys aren't really yet providing a ton of color on 2024, but based on the dynamics of what you're seeing today, and particularly, some of the good trends in enterprise and B2B, I mean, is the expectation still... I mean, is it fair for us still to be kind of thinking about double-digit top line and bottom line as we think about, maybe the intermediate term, or would you guys qualify or change that at all? Yeah, I would, I would say that that is a fair expectation. You know, if I were to offer an opinion on, you know, the current guidance that is in the market, you know, I would say it's, it's a very low-end reflection of the trend of the business. And, you know, one of the... Look, our, the mix of our business and the, you know, frankly, just the rapid adoption of our Passport commerce platform by large enterprise partners, we would like to have a very keen appreciation and expectation of conversion before we, you know, I'll say, offer the 2024 guidance. That's why, you know- Yeah ... we've been evaluating because it dramatically changes the picture. And we don't wanna- Sure ... you know, we don't wanna be inaccurate. It's really that simple. Yeah. No, that's helpful context on both sides, so appreciate that. And then just lastly for me, maybe for Tim, the enterprise segment, can you maybe give us a little bit more inside baseball on how, you know, I mean, who knows what the macro is gonna do in 2024? But, but presumably, I mean, higher rates have been beneficial for this business. Can you maybe provide a little context about what some of the puts and takes are around rates on the enterprise revenue trajectory, both kind of just on an absolute basis, but also on the margins? ... Sure, happy to. So obviously, the rate components where we earn interest income on the deposit balances in that business, you know, that flows through, you know, at effectively 100%, you know, margins, right? It's a straight flow through. So, you know, that revenue in total interest income across the franchise for the quarter, you know, was just under $10 million. Roughly $6 million of that was attributable to, you know, the enterprise segment, right? So if you took the balance of the revenue in enterprise, you know, a lot of that still flows through at very high margins as well, right? To Tom's point, you have, you know, a high percentage of that revenue is, you know, monthly recurring revenue that's not volume or transaction dependent. So, it is, you know, a highly recurring, highly valuable revenue stream, that now is just north of 50% of our, of our gross profit. So I think, you know, while we've got, you know, some weight to the interest income, I think we're very pretty balanced with the other types of fee income we're generating across the business. Great. Perfect. I appreciate you guys. Oh, sorry, go ahead. No, no, I would submit to you as well, just on that topic, we're still early innings- Yeah. In taking that capability and pushing it into the SME vertical. Right. Right? So- There's a lot of volume growth opportunity still, you would say, just kind of regardless of where rates are? Yeah. Yeah, that's exactly right. The other thing I would just note about it, in the way we're positioned in that segment, we have a lot of assets that have come onto platform, or call a lot of partners that have come onto platform. That, let's just say a decline in rates would indicate, you know, some probably economic softening, which would further increase adoption. So- There, there's some levers to it, you know, like the rate benefit might not be as great, but it's not necessarily like a dollar for dollar drop, if that's the case. That's right. Because you'll just see, you'll see some more onboarding trends that would, you know, that would increase. And then, like I said, we're still early innings in just the rollout to the other segments of the embedded financial tools and their capabilities. So, which is... Look, I just, going back to, you know, your initial question about guidance, right? We want to get some adoption, you know, expectations and trends, which would give us better insight as to how we want to, you know, think about those metrics for 2024. Got it. But I'll just say, our current, our current guidance is, you know, I'll say it's built for failure, not success. Makes sense. No, and I, I appreciate you guys taking all my questions, and I'll let someone else jump in. But, but thanks. Thanks a lot. Thanks, Mike. Again, if you have a question, please press Star, then one. The next question is from Hal Goetsch of B. Riley Securities. Please go ahead. Hey, good morning, guys. It's a really good quarter and interesting commentary. I'd really like to peel back on Plastiq. It really seemed to have been a huge benefit to the B2B segment, and you guys broke even in that segment, you know, and I want to delve in, because, like, Plastiq was a company went bankrupt, so you've quickly gotten this whole segment to, you know, to basically break even. I want to know, what are the things you guys did to make that happen? Sure. Hi, Al. It's Tim. I'll jump in on that. So yeah, I think as we indicated last quarter, you know, we expected to get that business to cash flow profitability and EBITDA profitability in the first quarter of 2024. Yeah, I would submit that we're running ahead of that pace, you know, given some of the actions we've taken, and a lot of it is, you know, the ability to bring companies like Plastiq and others, you know, into the broader Priority franchise. And, you know, we use the term operationalize, you know, some of the business and, you know, find efficiencies across, you know, the infrastructure and the team we have in place. So we've been able to do that, really reduced a lot of the operating costs, you know, in that business, so far. You know, we haven't really ramped up the marketing spend and the go-to-market, you know, for that business yet. So there might be a little bit of increase in cost in the business in Q4, but, you know, nominally so. But I think we're very pleased with the effort so far from a cost standpoint. And then on the revenue side of the equation, there's still a lot of levers to be pulled, right? We haven't fully pulled all the levers that we expect to in that business to really drive the top line growth. But even what I would call somewhat, you know, baseline revenues that we had in Q3, we got that business to, you know, effectively almost break even EBITDA. Terrific. And then on SMB, you know, thanks for the color on what it would have looked like, excluding the loss of the transition of the reseller. Is it safe to say we should think about this as being kind of a headwind through, you know, Q2 of next year, where you first started feeling those effects? Is Is that the fairest way to say, and is there more, you know, more volume to come off, and then it's completely transitioned at this point? Yeah. Hey, Al, a couple things just to clarify. We didn't lose the reseller. They remain a reseller. And their—I would submit, their onboarding trends have certainly stabilized to increase. Stabilized, yeah. They were going through a diversification, which, by the way, I mentioned this previously, we couldn't blame them for it. It was, given their evolution, you know, it made some sense. That being said, what we have seen is a considerable increase of adoption of our reseller community. We've already signed 116 new resellers on this year through the first nine months. That would compare with a full year, last year of 70. So again, coming back to this collects, you know, what I'll call now collect, store, borrow, and send capability that our resellers benefit from with Priority. The adoption's been very, very strong, with folks just recognizing your portfolio is worth more at Priority. You know, it's just a fact, because there's more ways to help your customers and generate fees off things they're doing every day, less efficiently with other parties, like pay their bills, store their money, borrow money, you know, maximize their working capital, those, those types of things. So, we're actually, you know, on our newer agreements, we're, we're just seeing the benefit of, of, of better margins. Great. Terrific. Thank you. Yeah, and Hal, I'll just be adding on to that, just to your question on the impact for the next couple of quarters. I think if that business continues at its current rate, we'll definitely see some headwind in Q4 and into Q1 of next year. That'll moderate certainly into Q2 of next year, but I think the profitability impact of that, as I've mentioned in our prepared remarks, is somewhat limited. So I think it was more of a revenue impact. Obviously, you've seen us increase EBITDA guidance, so we're reflecting the impact of both of those, you know, in our guidance for the year. Thank you. My next question is from Brian Kinstlinger of Alliance Global Partners. Please go ahead. Great. Thanks so much for taking my question. So you've been adding 12,000 merchants per month for the last two quarters, from the 14,000 to 15,000 before the change of this reseller. As you look at the size and capabilities of your new resellers, I missed the number. Maybe you could give it again that were added recently. Do you expect to get back to that 15,000 or above? And as you look at those new resellers, will you be staying in your lanes with, I mean, do they focus on the same verticals, or are they bringing on some different verticals that you're not quite as experienced in, or does it change the risk profile at all? Sure. Let me just comment on a few things, and then maybe we can clarify the math a little bit. So first off, composition. These are actually—they're just higher-margin resellers than, let's say, the related to the merchant migration that occurred with the current reseller. It's important to note, as far as what we'll say, the onboarding trends which you referenced, those are actually quite similar. That hasn't really changed much. The net impact you're reflecting is a result of the migration of the reseller and those merchants. It's the net impact of the new merchants added and the merchants that were migrated to their alternative platform. Does that make sense? Yeah. So what you're saying is merchants are leaving, as opposed to you're not acquiring as many because of the reseller not bringing more to you. It's more of a migration issue. Yeah, exactly. So it's existing- The net number is lower. So you're seeing the meta number. Yeah, exactly. Exactly. Exactly. So, but the onboarding trends each month are pretty stable with where they've been historically. Okay. Okay. And then as you look at these, can you give the reseller number you added again, and do you expect that to accelerate the merchant count then from the 14 or 15 thousand that you're probably at, adjusted for that reseller? You know, remains to be seen. We think there'll certainly be a modest impact upward. It's 116 that have been added year to date. That was 70 last year for the full year. Is that what you said? 70 for the full year. Mm-hmm. Yep, yep. Got it. Okay. Okay, thank you. Look, I would submit to you, Brian, the more impactful thing, and the thing that we're focused on with our resellers is the recognition of: Guys, there's just more opportunity just within your existing merchant base, right? There's these opportunities to harvest that, no one's providing these customers. Bill pay, you know, opportunities for, you know, vendor spend management, where they can, you know, make incremental revenue, better optimize their working capital, use Priority's tool to accelerate their cash flow by using our Passport, you know, financial platform. You know, what that actually does for people, Brian, put a fine point on it, so you can appreciate this at a, at kind of a more genetic level. Customers that are on our gateway have their funds reflected in their Passport account in five minutes or less. If you're not a gateway, but a processing customer, you're getting that within the same day, typically 12 hours. Now, think about that if you're running a restaurant on the weekend. More often, if you're on a weekend, like in a traditional setting, you're not seeing that money for 2-3 days, right? Because the bank's not open on the weekend, but Priority is. So we're able to give people access to their money, and ways to use it to pay vendors and negotiate better terms that, you know, are, are really meaningful, particularly in this economic environment. And that's, that's where we're going. Like I said, we call it a unified commerce experience. That's what customers expect now, you know, and you add to that the ability to, you know, take that money and, you know, push it out to a salon worker on a, on a Passport account and or push the tips out to your servers on a Passport account, and now they can go out and spend and generate additional, you know, kind of interchange revenue that, that comes to everyone in that ecosystem. It's just a different model, and it's a fintech model. It's not a, it's not a merchant acquiring model. And, you know, that's, that's a big part of the message we're trying to, trying to get people to, to recognize. It's a different machine. You know, to Hal's earlier question, it's why we synergize things like Plastiq exceedingly well, exceedingly quickly. We're built to optimize the performance of software and payment assets. you know, the results speak for themselves. We can point you to other examples, but we do it well because we're very intentional about it. And, you know, this company, if I could say it as purely as this, is like we just have something to prove, and everyone in here thinks that way. Great. Thank you. The next question is from Natasha Otten of DGA. Please go ahead. Hi, good morning. You mentioned that the growth margin decline in the B2B segment was related to the addition of Plastiq and how they need to report their financials differently from a GAAP standpoint compared to the rest of the B2B business. Could you please explain that further and why it's treated differently? Thank you. Sure. Hi, Natasha. Yeah, I started to explain that last quarter as we, you know, acquired Plastiq and some of the different GAAP requirements. But, you know, I've got the benefit of sitting here next to Rajiv Kumar, who's our Chief Accounting Officer, who does a fantastic job for us. So I may let him try to answer that a little bit better this quarter and see if we can, you know, dispel some of the other concerns out there in the market on those gross margins. Thanks, Tim. So Plastiq, you know, the business model is that they are merchant of record in the transactions where they're accepting payments. So they collect the gross fee as a principal, and then they pay interchange as if interchange like, you know, card networks are their service providers. And that is why GAAP requires in that scenario that revenue should be recognized on gross and all the interchange payments should be recognized as cost of services. Whereas if you compare that against our merchant acquiring business, there we collect fee from the customers of merchant on record, and then we settle them on their behalf, and therefore, they are not our fee, they are not... The interchange is not our expense, and therefore, we have to do that netting that we do. So hopefully that, that answers the question. The real difference is that Plastiq is a merchant of record in all the transactions that they are processing, and therefore, we are required to record those revenue at the gross basis. Yep. So Natasha, the net effect there is that the, the margins for the Plastiq business, you know, look lower, but, on a, you know, transaction basis, you know, the, the revenue, as we would think about it, maybe apples to apples to other parts of our business, gross profit more approximates, you know, the revenue of Plastiq if it was looked at the same way as the rest of our business. That's correct. Thank you both. This concludes our question and answer session. I would like to turn the conference back over to Tom Priore for closing remarks. All right. Well, I hope everyone has an excellent weekend. I wanna just thank everyone for taking the time to, you know, to follow our story, learn more about where we're headed as a business. We look forward to continuing to deliver for our investors. And rest assured, you know, we've got a very dedicated team that, you know, hopefully it's starting to be very clear to folks are laser-focused on performing. So thank you, everyone. Have a great afternoon and a terrific weekend. And given we're not gonna speak to everyone for a while, fantastic Thanksgiving and holidays. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.