Timothy Horan: That’s for sure. And OpenAI and ChatGPT has been in the news quite a bit here lately, and AI in general. Can you talk a little bit about how you can kind of leverage AI with your product suite going forward? And do you think you can integrate ChatGPT into your products?
Brian Shepherd: Yes, we do a lot with natural language processing and AI and have for the last two or three years, I would say, the couple of areas that it’s the biggest right now, and we work with several large and midsize innovative partners to do that. Around some of our solutions around digital CX where we can actually help take the mountains of data they have and drive personalized journeys and experiences for those individual customers, we see AI and natural language processing giving our solutions a huge leg up where we can then help these large brands to just get more targeted, improved experience in a more cost-effective way. And on the telecom side, we see it around both 5G, but also in some of the network fraud detection things where we use our technology combined with others to detect what might be fraudulent activity on an interconnect or roaming aspect.
And I think we’re just kind of getting started. ChatGPT, we’ve looked at. I mean, it is kind of — it’s almost — it’s hard to fathom what they’re doing and some of the use cases that are coming out. We started to experiment. We don’t have any live active integrations today, but I think that’s likely to change and evolve quite a bit in the coming quarters based on what’s coming out and with some of that, it’s — that’s going to be fascinating and fun to watch.
Timothy Horan: Well, and I guess, ChatGPT, there’s going to be a lot of winners and losers, obviously, you have to execute, but do you think this is a positive opportunity for you?
Brian Shepherd: I think AI in general, I probably won’t get to — I won’t pick the winner today. And it’s likely that, that could change over time in terms of how we did just like cloud evolved a lot over the last five or six, seven years. But AI is a cornerstone of driving efficiency and automation in terms of how brands do work that make it easier for them to predict and give channels of choice for their customers, consumer or enterprise. So, I think it’s hard to imagine that ChatGPT isn’t going to both challenge and threaten and potentially create some displacement opportunities with some of the existing AI and natural language processors that are out there. Again, we haven’t moved in their direction yet. It doesn’t mean that we won’t. So, we’re still analyzing and doing. But AI as a core is essential to award-winning digital cost-effective digital customer experience in our mind.
Timothy Horan: Well put. And then lastly, what interest rate are you assuming next year or interest expense with your EPS guidance?
Hai Tran: It’s about mid 6% right? If you think about — our floating rate debt is generally based on LIBOR. LIBOR has gone up north of 4.5% in 12 months. So, right now, we’re projecting mid-6%.
Timothy Horan: Thank you.
Brian Shepherd: Thanks, Tim.
Operator: Our last question comes from Matthew Harrigan with Benchmark.
Matthew Harrigan: Thank you. I have two questions and one follow-up. You didn’t touch that much on the payment business other than allusion in M&A discussion. But particularly on the ACH side, how is that getting affected in the current economic environment? And then, on Xponent Ignite and all that, how much resistance are you getting from your corporate clients on the marketing side off the economy? Or do you feel like you really have a pretty coherent selling strategy (ph), “I mean, look, this is just very high ROI. And what sorts of ROIs are you looking?” I’m sure you’ve got a pretty broad range there.
Brian Shepherd: Yes. No, thanks, Matt. Hope you’re doing well. I’ll take the first one. On the payment side, we took a meaningful hit as we talked about going back a couple of years ago when we saw the early- to mid-stages of COVID, we lost about 8% to 12% of our transaction volume, which is some of the recurring charges on the ACH and even the credit kind of get turned down, including some of the property taxes where state governments stopped charging for credit card fees and others. And we kind of grew through that as we kind of stayed flat. We saw good double digit growth return in 2022. And we expect strong double-digit growth in that business. We like the demand signals we’re seeing across the board in our payments business, both on the ACH and on the credit side.
And so, we think that there’s — we kind of weathered the storm, if you will, in 2020 and 2021. And now it’s back to growth, back to margin expansion and just that scale in that business. We’re pretty excited around what’s going to come in the front windshield with that part of the business. On the second side — the second part of your question was more around — let me make sure…
Matthew Harrigan: Just sort of ROI you think your customers can see on Xponent Ignite? And is the economy hindering that, or is it actually pushing them to be a little bit more efficient?
Brian Shepherd: At this stage, I want to make sure, I guess, it could change. But at this stage, we see it being a board level decision with a hard ROI. So, what we’re seeing in the market and the reason there’s so much traction right now is there’s an immediate payback. Usually, it can get deployed in 60 to 90 days. There can be a payback within less than 12 months in terms of where it is. And the payback really comes in three forms. One, often moving from a physical channel to a digital channel is actually going to reduce costs. And if you can take steps out by orchestrating the journey is better in a more efficient way, so it’s a cost reduction that can pay for itself. Two, up-sell and cross-sell, and what we’re seeing in some of these areas like we talk about on promotion roll off with a large cable or a telecom customer, if we can help them reduce the customers that churn during a promotion-ending period or around some of the appointment notifications where there’s over $100 billion dollars lost in the healthcare industry alone by missed appointments, again, that’s another example of driving revenue and paying for self.
And then, third, just the retention and loyalty benefit that comes from an improved ease of doing business in a digital world. That’s actually what we’re seeing is just fantastic momentum in the market and we just got to take advantage of it and respond, sell more, sell faster, cross-sell and up-sell the existing new logo wins we get. And we love what we’re seeing, but we also don’t take it for granted. We know that can change, so let’s push hard and make sure that we keep rolling in the new deals.
Matthew Harrigan: And if you tip toward the upper end or the bottom end of the revenue guidance range, which isn’t really all that wide, do you think it’s more likely to be a function of having more selling opportunities and innovation? Or do you think it’s more likely to be affected by wherever the macro goes both in the U.S. and Europe?
Brian Shepherd: I’ll give a high level, and then I’ll let Hai add little insights he might have on it. I mean, I think we are seeing and this is — we’re seeing a hot market and a big demand, which is driving that level of growth last year and even bigger organic growth in 2023. So, we love the demand signals in terms of where the market is both in global telecom in our North American business and in digital CX in payments. But we have seen — I mean every company is trying to shave some discretionary spending. So, we actually felt that throughout the core over the last six or seven quarters. So, it’s not like that cost pressure is not there. We grew through it, which is — it will gives us a lot of optimism in terms of the upside.
Will brands continue to try to squeeze costs? The answer is yes. They have been. They will continue to do that. So, to be at the upper end, what we’ve got to do is continue to have that strong win rate, the strong successful conversions and deployments of our solutions and continue to just win that double digit sales growth that will help us grow at the upper end even as we offset some of the discretionary spending that is definitely having. I think to be at the lower end, you would need to see a lot of things happen. But again, it’s still a tough market. So that’s why we give that range that we do. And we really want to see that strong start in Q1 and Q2. But, Hai, other comments and color from you.
