We got it done earlier than that. The teams are working efficiently and effectively, and we are excited about the opportunities to continue to enhance. And the number of ideas we have is high. So we’ll be doing that for customers as we move forward here.
Andrew Schmidt: Thank you very much, René.
René Lacerte: Thank you.
Operator: Thank you. Our next question comes from Keith Weiss from Morgan Stanley. Keith, your line is open. Please proceed with your question.
Keith Weiss: Excellent. Thank you guys for taking the question. Maybe a little bit of a different focus. Last quarter, we talked a lot about the changing relationship with one of the major FI channel partners. How should we think about sort of – and it got a lot of investors excited because it went from a kind of transactional ability to get to the new customers to a base equation of where you could go after the entire customer base. How should we think about the time frame of that where that could have a positive impact on kind of new customer adds? Like what are the kind of milestones or the roadway, if you will, that we should be thinking about in terms of getting that sort of going in a good way?
René Lacerte: Thank you, Keith. We are actively working with our partner to enhance the capabilities so that we can roll this out to all of their customers. It’s something that we’re actively doing. We will give you an update on the timing of that for that particular partner when we have one later this fiscal year. But I would just really kind of – when I think about I step back and I think about the ecosystem developing, like this does not happen overnight, but we have created this category and this opportunity for SMBs to have one financial hub for all of their financial operations. That’s unique. And we’re seeing it in the ecosystem. It’s not just the partners we’ve announced and the partners we’re working on, but it’s what we’re seeing in the pipelines, what we’re seeing from just in general, what we hear from accountants like people are getting pretty excited about the opportunity to have one place to manage all these financial operations and the platform to do that is BILL.
It’s something that’s not easy to build. It’s something that has taken us time. But having the integrated platform integrated in a way that we can actually now add these different payment products on making that available to our partners to our accountants, those are all things that I think about the ecosystem being super important. So it’s not just one partner. It’s really all the opportunities we see in front of us.
Keith Weiss: Excellent. Thank you, guys.
René Lacerte: Thank you.
Operator: Thank you. Our next question comes from Kenneth Suchoski from Autonomous. Kenneth, your line is open. Please go ahead.
Kenneth Suchoski: Hey, good afternoon, guys. Thanks for taking the question. I just wanted to better understand the assumptions in the guidance. Are you extrapolating the October trends, I guess both what you’re seeing on TPV and payment-type selection? Or are you assuming it gets worse in November and December and then sort of stabilizes from there?
John Rettig: Thanks for the question, Ken. So we’ve taken a look at the trends from late in the first quarter. Those have continued into the second quarter. Our assumption is that those trends persist through the quarter. We begin to see some stabilization in Q3 and throughout the rest of the fiscal year. It’s really – as I mentioned, overall, pretty stable spend environment, but some moving parts around payment type composition. And that’s the thing that we’ve tried to capture in our assumptions for the rest of the year that there is some adjustment that’s happening now. We’ll get ahead of that in the second half of the year and start to drive incremental adoption to overcome or mitigate some of those behavioral changes.
So it’s not something that we expect to, for example, deteriorate throughout the year or anything like that. But we are assuming the trends we’ve seen early in the December quarter and late in the first quarter continue this calendar year.
Kenneth Suchoski: Okay. And John, just on that point, I mean what transaction take rate is being assumed in the guidance for the rest of the year? Is it stable quarter-over-quarter? Or is it declining? And I guess, is there an opportunity to offer some other solutions like working capital or pay by card in this type of environment to sort of offset some of those headwinds.
John Rettig: Yes. So our assumption for the second quarter is for our monetization to be down slightly and then grow in the second half of the year such that we exit the fourth quarter above where we were in the first quarter. And to your – the second part of your question about other products, that’s 100% true. So we think – we have highlighted FX transactions and virtual card payments, just as examples because those have been large drivers of growth historically. But we have some really good trends happening with some of the newer products, including pay by card and working capital. That we think can be significant drivers of monetization expansion, not only later this year, but in years ahead. So we’ve talked in prior quarters about this portfolio approach that we take with ad valorem payments. And we expect some of these newer payment products to be able to at least partially mitigate some of the trends that we’ve seen recently.
Kenneth Suchoski: Okay, all right, great. Thanks so much, John, René.
René Lacerte: Thank you, Ken.
Operator: Thank you very much. Our next question comes from Brent Bracelin from Piper Sandler. Brent, your line is open. Please go ahead.
Brent Bracelin: Thank you. Good afternoon. I guess, René for you. We’re seeing a number of stress fractures in the SMB sector emerge. I think Zoho in October, Paycom, ZoomInfo in the last week. Can you quantify how much of the spend slowed in October versus September? And are you now seeing these SMBs start to cut nondiscretionary spend?
René Lacerte: Yes. Thanks, Brent, for the question. There are – best way for us to probably talk about it is that a large business is going to have a dedicated finance professional whose job is to look for how do you manage expenses down when you have a wait-and-see economy, a holding pattern. And so that’s why we keep talking about the larger businesses, of which our Spend and Expense platform has more larger businesses than the core BILL platform and why we are seeing more of the impact for the rest of the year from that segment of our business. And so when we look at the overall small business portfolio that we have, we’re very fortunate because we have customers of all sizes. And most of the businesses are managing their spend, which is why John has said, and we’ve said that the spend is generally stable there’s some downward pressure, but it’s generally stable.
