Hello, everyone, and welcome to the Usio Fireside Chat. My name is Robert Blum, Managing Partner here at Lytham Partners, and up next here, I will be moderating a Q&A discussion with Michael White, Chief Accounting Officer at Usio. Quick reminder, Usio trades on the ticker symbol USIO on the Nasdaq. All right, let's get started. Michael, welcome. Appreciate it. Excited to be here. Thank you, Robert. Fantastic. For investors new to Usio, could you provide an overview of the company, how it makes money, and how your experience at Usio has shaped your perspective on the business? Absolutely. For investors who are new to Usio, we are a payments technology company with really three core businesses. The first is our acquiring business, which helps businesses accept and move money. That includes ACH, real-time payment options, and PayFac, which allows software companies, integrated software vendors, to embed payments directly into their applications. As those software platforms grow, we grow with them. Second is our Card Issuing business, where we issue prepaid Mastercard that help businesses, nonprofits, government entities disperse funds quickly, securely, and efficiently. Third is our Output Solutions, which provides both physical and electronic document presentment and delivery. Across these businesses, our revenue is driven by activity, and depending on the product, we earn either a fee per transaction, a percentage of dollars processed, or for Output Solutions, fees based on the communications we deliver. I have been at Usio for around six years, and what has really shaped my perspective is seeing how payment preferences continue to evolve, whether it is ACH, cards, pinless debit, or real-time payments. Our strategy has always been to provide all payment methods and support our customers by providing which option best fits the needs and also continuing to innovate as the market evolves. On that point there, the company evolved from a traditional payment processor into this broader payments and financial technology platform. How should investors think about that evolution and as it relates to the company's longer-term vision? Yeah. So like you said, we have gone from offering really individual payment products to building a full set of integrated payments into one single platform. That evolution has really been driven by customer demand. Our customers want one partner who can support multiple, really all payment types rather than managing a patchwork of providers. Our long-term vision is to continue expanding the platform so that customers can access more payment capabilities through our single platform. That really creates a better customer experience, opens more opportunities to deepen the relationships that we have with our customers, and builds a more scalable business over time. Because really ultimately, we want to continue to be the trusted payments infrastructure that our customers rely on as they grow and the payment landscape continues to evolve. Maybe walk us through the economics of a typical customer relationship, how you generate the revenues. You talked a little bit about that. What really drives the value of the relationship over time with customers? Yeah. One thing that's cool about our model is that we see that often our customer relationships become even more valuable over time. A customer might start with one solution, and as their needs evolve, we have the opportunity to support them across different Usio solutions. From a revenue standpoint, our business, like I said, is activity-driven. In payments, that's a per transaction fee or a percentage of dollars processed. For context, last year we processed $8.4 billion in payments across 61 million transactions. Depending on the product, like I said, we're charging either a fee per transaction or a percent of the dollars processed. In Output Solutions, it's based on the volume of communication. In 2025, we physically mailed 25.5 million statements, invoices, paper documents, and 88 million electronic documents. All of that activity contributed to us generating $85.5 million in revenue. What's really driving that is from day one on the customer side, we aim to be a strategic partner. Because as our customer grows, we're growing with them. That alignment, their success being tied to our success, is one of the powerful aspects of the model that keeps these customer relationships very sticky and that's a powerful part of our model. Let's dive a little bit deeper into some of the items that you mentioned there. Let's start with Usio One, the Usio One strategy. How does it improve that customer experience while also supporting the cross-selling, the retention, and really the operating leverage? Yeah. For those who are new, Usio One was an initiative we launched about a year ago, a little more than a year ago. It's about presenting Usio as a unified platform to our customers. It allows us to go to market with a more coordinated way and provide customers with a consistent experience across our product set. That approach has really already created meaningful cross-selling opportunities, as you mentioned. For example, one of our larger Card Issuing customers has since become one of our larger ACH customers, and that's exactly what this strategy has designed to do, deepen those relationships as our customer needs evolve. Internally, the strategy is helping us drive deeper efficiency by reducing duplication, better leveraging our existing resources. Essentially, we're improving both the way we serve customers, but also as we operate as a business. PayFac, I want to maybe touch on that here for a moment. We haven't touched on it much, but it's sort of become an important growth engine. What makes that model attractive to software companies and why is it strategically important here to the company? Yeah. For software companies, PayFac essentially turns payments from a call center into a monetized feature. Instead of an integrated software vendor sending their payments elsewhere, we help them embed payments directly into their software, and then we also share in the transaction economics. This creates a new recurring revenue stream for them, the ISV, while also improving the experience for their customers. For us, we provide the payment infrastructure underneath that experience, whatever software they're providing, and that creates long-term relationships and transaction growth that's directly tied to our customer success. You've touched on ACH and pinless debit earlier in the conversation here. They've sort of been strong momentum drivers here for the business. What specifically is driving that growth, and how durable do you believe that opportunity is? Yeah. We're seeing ACH and pinless debit both have strong momentum, but really for different reasons. ACH continues to be the most cost-effective way to move money. At the same time, we're seeing growing demand for faster access to funds, which is driving the adoption of pinless debit and now increasing interest in our real-time payments product as well. For transactions where timeliness isn't as important, it could be recurring loan payments or bill payments for insurance or utilities, ACH is a great use case for that. But where there's a quicker access to funds that's needed, whether that's funding for a loan or disbursements for some sort of disaster recovery, real-time payments is an important product in that scenario. The important point for us is that we're not dependent on any one rail. Our strategy has always been to support the payment method that best fits the use case, whether it is ACH, pinless debit, or RTP or another option as the landscape evolves. We pride ourselves in always providing access to all payment options to our customers. On the flip side, the prepaid card services face some recent pressures. How should investors think about the path to rebuilding that business and its role within the broader platform here? Yeah. We have seen some customer-specific headwinds in Card Issuing, whether that is due to customer acquisition or a large program rolling out or winding down, which affects our comps. But we continue to believe it is a really strategic part of our platform, largely because of what we call consumer choice. So when one of our customers needs to disperse funds, the recipient end user is notified that the funds are available to them and then is able to choose how they receive it. So that can be a digital card sent to their wallet on their phone, a physical prepaid card mailed to them. They can choose an ACH transfer, pinless debit, real-time payment, or even a paper check through Output Solutions. That flexibility matters, especially for users with different banking needs or even limited banking access because we support multiple payment rails under one platform, we are seeing that that is helping us compete for larger disbursement programs. You just mentioned it there, Output Solutions, it's almost sort of a distinct part of the company's offerings. How does that business complement the payments platform, and maybe you just sort of touched on it there, and how is the shift towards electronic delivery affecting that opportunity? Yeah. Output Solutions is really a unique part of our platform because many customers don't need to just move money, they also need to communicate with the people that they're either paying or collecting from. So a great example for that is toll road authorities where we help process payments, but we're also delivering critical customer communications. As you mentioned, as communication preferences evolve, we're supporting customers across both digital and physical channels. We are seeing growth in digital delivery, but we're still seeing growth in physical delivery as well. The key is that customers don't have to choose one or the other. We're supporting both options. Let's dive a little bit more into the end markets and the market verticals that you guys serve here. You serve several of them, lending, healthcare, property management, utilities, government. Talked about a few of those already. Where are you seeing the strongest product market fit today for your services? Yeah. We are serving several vertical markets. I think utilities is a great example of where our full platform comes together. So they need recurring payment acceptance. People need to pay their bills. They need customer communications, whether that's sending invoices or hurricane notices, and they need disbursement capabilities like deposit refunds or overpayments. That's a great example is how our full suite of services comes together for one specific vertical. But that same dynamic really exists across many of our verticals. Wherever payment workflows are complex, our one platform approach simplifies operations for both organizations and their end users. Okay. You compete against obviously much larger payment companies. What are the key factors that allow you to win business and sort of build those durable customer relationships that you've talked about? Yeah. So we compete successfully because our customers value the flexibility, responsiveness that we offer, and also want a partner that can support multiple payment and communication needs through the relationship. So, rather than stitching together multiple point solutions, customers can rely on Usio as a trusted platform, and that flexibility is what helps us deepen and retain customer relationships over time. Additionally, I think what's unique about Usio is we strive to be a strategic partner from the start. We've seen many small companies or even start-ups come to Usio, and we help them build their strategy around payments and essentially helping them become successful and grow over time, and that contributes to our growth as well. Yeah. I want to come back to something you mentioned earlier, and sort of payments are increasingly being embedded within vertical software platforms. How far along is that trend, and what sort of separates companies that can monetize payments successfully? Yeah. We think embedded payments still has a long runway. More software companies are looking to create a better customer experience while also they want to generate another revenue stream through payments. Another point is that investors often place a premium on software businesses that have successfully embedded payments because it deepens monetization and also their customer relationships. That is where we fit well because we provide the infrastructure that allows software companies to monetize payments, deepen their relationships, and grow over time. Without a Usio, that could take several million dollars and a couple of years to become a payment facilitator. For us, we can easily plug into their software, and then they can quickly start generating that revenue stream behind processing payments. When you sort of look to the future here, and you have touched on all your various services and things of that sort, but at the end of the day, customers expect faster payments and more choice in how money is moved. How do you see the broader mix of payment methods evolving? Where are we heading, and what does that ultimately mean here for the company? I do think that the future of payments is increasingly going to become more real- time. Customers are increasingly expecting speed, but also consumer choice. I think that is why we are seeing the increased demand for real-time payments and pinless debit. But we are still seeing the growth in ACH. Speed is not always the top priority. Sometimes it is cost. ACH still remains to be an important cost-effective rail. All that to say is we do not really see one method completely replacing another because there is different use cases for different solutions, and our strategy is really just to support the payment method that best fits each of our customers' needs. In the few minutes that we have left here, you have delivered record revenue and transaction volumes, along with positive net income and operating cash flows. What are the key levers for translating continued growth into higher margins and stronger cash generation here? Yeah. So over the past few years, or really several years, we've invested in our technology, our risk management operations, so that now we can support more volume without growing costs at the same rate. Usio One is a big player in that. It's helping us reduce duplication and streamline how we go to market. We're also benefiting from the process automation across the back office, which has improved efficiency as we scale. The combination of volume growth, a more streamlined cost structure, and disciplined execution and expense management is what we believe supports margin expansion and stronger cash generation over time. When we're talking about gross margins, payments in general, as you know, the margins are slim, especially in the PayFac business line. For ACH, it is strong margins, but because we're at the scale where we are, we're able to now go back to some of our partners and negotiate better pricing and push for margin expansion there as well. Okay. Kind of closing out here, as we look out three to five years, what are the milestones that would demonstrate that the company is sort of successfully scaled? What do you believe investors may still underappreciate about the company here today? Yeah. Three to five years from now, I think success means continuing to deepen the customer relationships, growing transaction volumes across all of our payment rails, and also continuing to win larger long-term partnerships. I think what investors still maybe underestimate is the breadth of what we've built. There are many payment companies out there, but Usio is unique in the fact that everything that we have under one roof, so we have payments, disbursements, communications, and all those things work together to solve bigger customer problems. Ultimately, overall, our goal is to continue to be the trusted payments infrastructure that our customers choose to grow with, and we're seeing that be the case, and we're also seeing larger opportunities come our way, just because of the status that we've built in the market. All right. Very good. We will leave it there. Michael, thank you so much for, excuse me, your participation here in the summit. Thank you everybody, of course, for watching. We have additional presentations and fireside chats coming up, so stick around for more. Again, Michael, thank you so much for your participation here today. Thank you, Robert. All right. Have a great day, everyone.