Repay Holdings Corporation (NASDAQ:RPAY) Q4 2022 Earnings Call Transcript

Andrew Schmidt: Got it. That’s, helpful. And then if I could sneak in one on just Business Payments. I appreciate Darin’s commentary on the more verticalized go-to-market approach. I think that makes a lot of sense. Maybe you talk about just vertical expansion. When we think about vertical expansion, is that approach likely to come from organic or inorganic? And that kind of segues into an obvious question, on capital allocation and what the M&A pipe looks like. But first, just a question on just verticalized go-to-market and then expansion to different verticals. Thanks a lot, guys.

John Morris: Yes. Hi, this is John. So from an inorganic perspective, we obviously as you’re aware we have our own M&A team that we have a healthy pipeline of deals that we look at from time to time. And specifically, we would love for an opportunity to continue to build in both our Consumer Payments and Business Payments with the right specific strategic asset. There are fewer — as you’re aware, there are a few of those out there specifically on the B2B side. But we would look to — if it’s complementary, and very strategic that would be something we would be very interested in evaluating. And that €“ generally, acquisitions themselves would come with additional verticals, inside of that Business Payments if it were Business Payments.

As far as the opportunities on adding additional verticals, that can happen and does periodically happen and we would see that happening in our foreseeable future specifically, it would come naturally as part of some type of integration or even some type of our ERP integrations as you’re aware, are not specifically exactly vertically focused. They’re — we find opportunities in multiple different areas, as we — we didn’t exactly start in all the ones we are in today. So, I’ll let maybe Darin, add some additional color to that.

Darin Horrocks: Yes. Thanks, John. So a perfect example of vertical expansion this past year, has really been us further penetrating and focusing on the hospitality management space. And that really came pretty organically, through an integration partner, wanting to use our technology platform and connect to us via APIs. And we’ve made several announcements this past year, of hospitality management systems that wanted to really be able to offer payments as a service, as part of their software offering and they’ve been able to do that by leveraging our technology and expanding. And because of our success there right, we’ve really focused on that vertical to expand. And so that’s, an example. And I think there’s more opportunities like that, as we look at further expanding into additional integration partners.

Andrew Schmidt: Thank you, John. Thank you, Darin. Appreciate the comments.

Operator: Thank you. Our next question is from the line of Andrew Jeffrey with Truist Securities. Please go ahead.

Andrew Jeffrey: Hi, good afternoon, everybody. Thank you for entertaining the question. Question on RCS. Can you characterize the type of business that your partners are bringing you in that channel or to that — to your back end. I assume that all that volume is very nicely incrementally profitable. I just wonder about sort of the characteristics of growth at RCS. Does it kind of match the rest of the company? Maybe just frame it up vis-à-vis the sort of — I’ll think about it as the front-end business that you’re driving through your Consumer and B2B business segments?

John Morris: Yes. Hi Andrew, good afternoon and thanks for joining us. So, this is John. So, it is specifically on RCS, as you are obviously aware, Repay, we’re actually — its largest client, right? And — but also, we find that especially as we’ve invested in modernization we’re really excited about our new launch of that modern platform this year. We have found specifically in our industry as you — as it’s called RCS it’s our Repay Clearing & Settlement engine, IT’S a real strategic advantage for us and we have found in the marketplace that people have recognized that. It turns out to be a small world after all. As you can see at times in our business and our expertise and our ability to extrapolate that out into the future we think that’s a really positive for us.