Eamon Coughlin: Perfect. Thanks, guys.
Operator: Thank you, one moment for our next question. Our next question comes from the line of Alexei Gogolev of JP Morgan. Your line is now open.
Alexei Gogolev: Hello, everyone. Could I ask you to provide a bit more color around the level of payments attach and which solutions are you seeing the greatest attach level?
Matthew Feierstein: Yeah. I’ll start, and Evan can certainly follow. When you think about payments attach, in our core systems of action, we see really a mid-30s attach rate from that perspective, so, nice progress, but obviously real opportunities. Those attach rates really vary based on the maturity of payment programs, how long they’ve been there, in certain cases, how deeply embedded payments are into the workflow of that solution, so that could differ in home improvement versus pest [ph] control. In EverPro, obviously, we see a great opportunity and many, many of — a lot of our existing programs are in EverPro. Obviously, that differs a little bit from EverHealth where we do have payment programs, which you have the insurance pay side of that as well.
So when you think about which solutions — think about within EverPro and across our EverPro environment, that’s in both up and down in terms of really our downmarket solutions and our upmarket solutions opportunities and execution against the payments opportunity there. So that spans from home improvement all the way through break-fix and field services. Evan, anything to add?
Evan Berlin: I would just add, one of the solutions within EverPro, we’ve been very focused on driving payments attached on new customer acquisition. And from last year, Q1, we were at 30%, this quarter, we’re at 41%. So I think just underscores not only the importance of executing against that and ensuring we have the right value proposition and the right selling motion, sales-led and product-led, but really ensuring that once we get those customers enabled for payments, that we can ultimately drive their activation, utilization, and expanding share of wallet, as we’ve talked about before, with the right product workflows embedded inside. So, we continue to work on that, as Matt said, across EverPro and EverHealth and EverWell, but good progress in Q1.
Alexei Gogolev: Great. Thank you. And another question on payment. Could you maybe comment on what you see as midterm normalized level for payments revenue growth? Would it be fair to say that 11% in Q1, obviously that somewhat of a deceleration versus what we’ve seen last year? So how are you thinking about it in the midterm?
Matthew Feierstein: Let me start to contextually — remember, we talked about this on our last call in the last quarter. We had — for the prior escalated the revenue growth rate. So when you normalize for that, it looks a lot closer to where it is today. I think obviously, this remains a key focus within our investment strategy. So, I won’t — I’ll let Evan comment on the sort of mid to longer term, but I think we have a number of initiatives in place where we’re investing against that and certainly hope to create some upside from where we are today.
Evan Berlin: Yes. Matt, I’ll just follow on with that. I think we’ve talked about in the past that a portion of our TPV is in more matured portfolios that is growing at a lower rate. We would point out that 28% of our aggregate TPV today is in our top five largest opportunities. Those opportunities together are growing at 23% year-over-year from a TPV perspective, and all of them are sub-10% penetrated from a total opportunity standpoint. So, we will have to grow through some of that maturity in the portfolio, but as you think into the nearer and the long term, those top five solutions and our opportunity and the fact that they’re growing faster will help us accelerate growth rate out into the future.
Alexei Gogolev: Understood. Thank you very much.
Operator: Our next question comes from the line of Clarke Jeffries of Piper Sandler. Your line is now open.
Clarke Jeffries: Hello. Thank you for taking the question. Two from me. The first is, I was curious to hear the third-party advisor that you hired in assessing the operations. The full run rate will be at the end of 2026. So I was curious about the different buckets there. What could be sooner? What will take more than a year to sort of transact on? And in aggregate across the different categories, is this a relatively linear path to the full run rate or is it bunched up in the near term or back end? And then one follow-up.
Matthew Feierstein: Why don’t I take that one, Clarke? There are a lot of different initiatives. So I’ll try to distill it up. I think the word optimization really applies to focus that’s been really in the last quarter and obviously through the balance of the year. And the blocking and tackling initiatives around driving better third-party spend managements, which against an expense base of our $250-plus million third-party expense that creates significant opportunity, that will happen in chunks. There’ll be some big rocks that will attack, which will start to run through this year and then annualize into next year and beyond. So those will be some of the early components of optimization. Things like looking at some of the spend for ’25 as we exit the year, those will obviously transpire through ’25 and into ’26.
A lot of the initiatives, though, again, which I think will start to appear probably in the second half of this year as we start to operationalize them, they will relate to the way in which we’re doing business, related to transformation initiatives of a variety of forms, organization, organizational alignment, brand and product consolidation, et cetera. Those initiatives will drive continuing optimization, I think, really beginning — early at beginning, at the end of this year and really into ’25, which is why the timeline is really the way we kind of talk about it. But I think, the goal is really to be exiting ’25 on that full run rate basis. So if you think about where we are at a point in time here in May, and we’re looking really at, we’ve said originally this was kind of 18 to 24 months.
We don’t see anything that’s really different today just based on progress, as Matt alluded to earlier in the call against the number of these initiatives that are in flight, and there are a lot of these in flight.
Clarke Jeffries: Yes, perfect. Certainly helpful. Appreciate across these different buckets, tools, assets, products, operations, there’s a lot to be put into that.
Matthew Feierstein: There is a lot.
Clarke Jeffries: Second question is just could you remind us about the seasonality of payments, or whether or not you would expect revenue to continue to outpace TPV for most of this year? I think in the prior question about the step up, but if I think about this sort of implied take rate just off of that high level view looks pretty healthy. Is that something you could see continue or is there any kind of seasonal notion from Q1 to Q4 to point out in terms of like implied take rate as we look at it?
Eric Remer: One thing to note — I’ll let Matt discuss seasonality. But when you think about the take rate opportunity, Matt discussed 28% of our top five solutions represent 28% of our TPV, and that’s growing at 23%. Those specific solutions, our take rate and those solutions are significantly higher than the rest of portfolio. So as that continues to grow, we expect to see additional opportunities to grow our take rate, both through this year and beyond.
Matthew Feierstein: Yes. And again, Evan, can chime in with other details. I mean, I think when you think about take rate and its seasonality per se, I’d really go back to the solutions where we’re — actually, where the payment integrations are happening. And some of those, when you think about seasonality in EverPro for say, we’ve talked about just across the swap, those businesses, Q2 and Q3 being the high points, Q4 and Q1 having some seasonality. So we will see payment volumes kind of ebb and flow there where we happen to have, kind of let’s say, larger net take rates in those programs that perhaps could create some seasonality in take rate there. But I would not say within any given program, there’s any seasonality to the take rate. It’s just kind of the portfolio dynamic that could create that.
Evan Berlin: Yes. The only thing I’d add is just the price increases that we generally put in the ground from a payments perspective have gone into the ground over the past quarter or so. So that’s there for the rest of the year. And at least from a pricing perspective, you won’t see additional take rate expansion across ’24.
Clarke Jeffries: Perfect. Yes. I really appreciate all that color. Thank you.
Operator: Thank you. One moment for our next question. [Operator Instructions] Our next question comes from a line of Bill McNamara of Evercore. Your line is now open.
Bill McNamara: Hi, guys. Thanks for taking my question on for Kirk tonight. Just wanted to follow up and ask, since spinning off the fitness solutions business, how are you thinking about potential acquisitions in the future?
Eric Remer: Well, thank you for the question. Yes, the thought process hasn’t changed really throughout. We continue to look at opportunities, obviously in categories that we feel that has long runways and we’re double down in. And just like our last acquisition was kick served in our EverPro group. We saw an opportunity to gap in the marketplace. So I think we’ll be prudent, making sure that it makes sense for the organization. And given all the other activities we’re doing, we are prioritizing internal growth versus M&A at this moment in time. But we’re looking at deal flow on a regular basis. And if we find something that we think is going to be a accretive to the organization, we will pursue that.
Bill McNamara: Okay, great. Thanks for taking my question.
Eric Remer: Thank you.
Operator: Thank you. I’m showing no further questions at this time. I would now like to turn it back to CEO, Eric Remer, for closing remarks.
Eric Remer: We’ll, thank you. We had a really solid quarter. We remain extremely excited, as we’ve talked about several times, but the transformation optimization initiatives we are executing throughout the company. We expect to see the benefits of those initiatives and the work we’re doing throughout the rest of this year and really end the year accelerating to 2025. Thank you all for joining the call today.
Operator: Thank you for your participation in today’s conference. This does conclude the program. You may now disconnect.
