Brad Sills: Great. Thanks for that color, John and René. And just one more, if I may, on the launch of the integrated platform here. What are you most excited about? Is the Divvy integration largely complete, do you expect that cross-sell opportunity to start to take hold from here? Thank you.
René Lacerte: Thanks, Brad. Yes, so we launched that during the quarter. The teams are just kind of getting up and running on the cross-sell opportunity. But the initial traction is good. It’s kind of what we were hoping for and expecting that there would be customers that obviously wanted to do both and that they would be able to put more of their spend and more of their wallet, so to speak, on our platform. The customer quotes we included from Bonadio Group and RenewalMD, we’re both integrated customers that are using the platform, the ways we intend. The other thing that is super exciting for us when we think about having the integrated platform is the ability for us to, over time, push more payment products and that drive more share of wallet across the customer base.
And so an example of things that we’re going to be able to do is being able to help customers be involved in connecting with their suppliers to pay by card. So we already have a pay by card product. But if you think about the Spend and Expense card or the rebates are coming back to the bill customer, having a more consistent approach for the customer to be able to manage all of their spend in one place and to be able to participate in any of the rewards that might happen from those pay by card transactions. We think that will also help drive supplier adoption of card payments. So just an example of how having one platform really matters and something that when I step back and think about the health of the business, like we’ve been building this category, defined this category over the last 17 years, and that doesn’t happen overnight, because you build a platform that actually has the capabilities and then you expand the capabilities and you enhance the experiences for your customers.
And so what I’m excited about when it comes to the integrated platform experience is that we’re starting to pull the enhanced capabilities that we got with the Divvy acquisition, and we’re putting that into the overall experience that we market and sell to our customers that we serve for our accounts and eventually, obviously make available for our financial institution partners. And that is the thing that actually when I step back and really think about the importance of this application is going to be for us to continue to be the financial hub for the SMB and having more payment choices available for the SMB, having them participate. That’s going to drive adoption, something that we’re super excited about.
Brad Sills: Thanks, René.
René Lacerte: Thank you, Brad.
Operator: Thank you. Our next question comes from Taylor McGinnis from UBS. Taylor, your line is open. Please go ahead.
Taylor McGinnis: Yes, hi, thanks so much for asking my question or answer my question. So your TPV guide implies down 3% sequentially. So can you maybe talk about how that compares to what you’ve seen so far at the start of the quarter in October? And if the guide assumes things can get worse, I’m just trying to understand the assumptions there. And then as a follow-up, if the TPV – it looks like the TPV guide for the second half of the year appears unchanged and assumes an acceleration quarter-over-quarter, which is greater than we saw last year. So can you just talk through some of the puts and takes there as well? Thank you.
John Rettig: Sure. Thanks for the question, Taylor. On the TPV estimates going forward, we are looking at quarter-to-quarter down low single digits, as you suggested. And I think that reflects some of the trends that we’ve experienced across the business over the last several quarters. We haven’t seen any significant deterioration or changes. But there have been, frankly, some pockets of strength around the core TPV for BILL. On the card payment volume, we’re looking at kind of flat quarter-to-quarter, up 20%, 25% year-over-year, something in that range. So we think that we’re still doing a good job at increasing our penetration of customers and increasing our share of wallet. That’s one of the components that leads to stronger TPV performance even in a lower spend environment.
And so that’s something that we’re seeing good success with. We’re assuming we’ll be able to continue doing that throughout the year. And we feel pretty good about the stability of the spend environment that we’re operating in right now versus some of the other moving parts of the business that we talked about earlier.
Taylor McGinnis: Thanks so much for answering my question.
John Rettig: Thank you.
Operator: Thank you. Our next question today comes from Darrin Peller from Wolfe Research. Darrin, your line is open. Please go ahead.
Darrin Peller: Hey guys. Thanks. I mean, I have to go back to the questions on cyclical versus structural, because the market is acting like something with your stock down the magnitude is after market right now. It’s acting like something that’s more than cyclical. And reality is the KPIs don’t look like it’s more than cyclical. So again, I mean, if we look at the KPIs, you have customer adds that look pretty strong. You had take rate expansion that was strong this quarter sequentially, your volume beat. But I guess you’re suggesting that the trends you’re seeing is all about the spend trends that’s really indicating your guide for the next quarter. Is there any other inputs on the KPIs that is informing the guidance that we should keep in mind? Or is it really just spend and maybe the side effect of ad valorem payment payments?
John Rettig: Thanks for the question, Darrin. I think you have the moving parts identified appropriately. We are in a muted spend environment. We do feel good about our ability to drive awareness, reach customers and sign up new customers that continues to go well. We see positive trends there, notwithstanding the macro environment. And in light of the softer spend environment, we’re also seeing more friction be introduced into the system between buyers and suppliers and more of a desire to lower the cost of acceptance. That is obviously something that we’ve factored into our estimates for certainly for the rest of the year as it relates to our ability to continue to drive incremental adoption on some of our ad valorem products.
It’s certainly not all. We continue to make great progress with products like pay by card or real-time payments and instant transfer and things like that. Those happen to be small relative to our overall payment volume though, so they don’t move the needle across the whole business versus some of the, I’d say, increasing headwinds that we’re seeing with things like our Vendor Direct product or FX that I mentioned earlier. So we think that these are – these changes in behavior and how customers and suppliers have maybe new initiatives to optimize their payment flows and costs. It feels transitory, like cyclical in nature. It’s not a change in retention necessarily of spend or things like that. So I think we feel pretty good about our ability to evolve through this particular period.
