So that’s really encouraging that there isn’t a population inside the gateway that is not willing to have the conversation. And as I mentioned in my scripted remarks, large enterprises take a long time to make decisions. So the fact that they’re willing to make decisions at this point means our tenacity has paid off. In terms of our approach, we slice it a handful of different ways. We look at the segment, meaning hotel versus restaurant versus retail. We look at the software that merchant is using. We look at the acquirer they’re connected to as a particular means for opportunity. So we approach it a bunch of different ways, and all three of them kind of have equal measures of success. I would say the majority of those efforts, though, are direct.
And why you should care about that is because the vast majority of these conversions don’t come with a residual share that would typically be involved in a third party, bringing us a merchant.
Timothy Chiodo: That’s really helpful. That seems like that’s a little bit different than a few years ago, so that’s really good to know. All right. Thank you, Taylor. The follow-up is on numbers. So when we take the Q4 volume guidance and also appreciating that some of the legacy Finaro is not fully in there for the full quarter. If we just take that, I know the seasonality of the business has shifted a little bit with new verticals coming on, et cetera. Is it still fair to think about the Q1 volumes should be up quarter-over-quarter as they were last year. Is there anything else that you would call out that would in terms of the changing seasonality? Clearly, the Finaro full quarter contribution helps, but beyond that.
Nancy Disman: Yes. No, I don’t think so. I think that’s a good proxy to think about just the grower from having a full quarter of Finaro and then the seasonality that you’ve seen from a first quarter perspective. I’m just thinking we will have obviously the benefit of all the Q4 implementations coming in, so – but nothing that would go the other way.
Timothy Chiodo: Great. Thank you for taking this. Appreciate it.
Operator: Our next question is from Jason Kupferberg with Bank of America. Please proceed.
Jason Kupferberg: Thanks, guys. I too wanted to complement you on the volume bridge chart and just ask a little bit more on it, specifically of those pieces of the bridge which potentially have the most risk or the least visibility as you sit here today.
Taylor Lauber: So I’ll start. And what I want to sort of maybe set tone relative to the volume bridge is we wanted to show a commitment to a medium-term outlook that we set out back in November of 2021 before kind of multiple words and a lot of macro concerns across kind of global economies. We still feel like it’s highly achievable. And I think it’s important to set that framework in everyone’s mind because we weren’t reaching for full potential across any one of these verticals. We were simply saying what’s an incredibly reasonable way to slice up the remainder we have to go. I think international is one I’m personally most excited about. The momentum we’ve had with the Finaro business in signing to get us a healthy portion of the way there and I think we will kind of alluded to that.
And then the annualization is obviously something we can rely on pretty comfortably. Obviously, you have to be cautious about macro, but just getting a full year of merchants that joined you the prior year and only contributed partial is something we can underwrite heavily. Jared, I mean, you’ve always got great insights onto the world ahead. Any comments you want to add [ph]?
Jared Isaacman: Yes. I mean, look, the layups are obviously the annualization of 2023. I would also say like sports stadium and ticketing is going to be pretty easy. I mean that’s a – I mean, I hope people really dig into how awesome of a deal Appetize really was. I mean, we are ushering them right over to the VenueNext product, and the VenueNext product comes with payments, as does our restaurant products too, for that matter. So we’re going to move them over. We’ll capture payments on that. And ticketing we’re having a lot of success in. So I feel really good there. In terms of like our core additions, which I think you were asking about previously, which is conversions and net new accounts. The actual population of like targeted independent hotels and such is more than double what we’ve actually plugged in for 2023 that we would consider like our prime targets for the year ahead.
So that really comes back to Taylor’s answer that where would be the risk aside is, well, you’re going into a new continent going after restaurants and hotels. I just say we have a lot of confidence in it. We already have SkyTab that are operational. We have our Opera and Oracle integrations already operational in Europe right now. So we feel really good about that. But that obviously you got to go out and you got to win restaurants and hotels in Europe, but we’ll welcome the challenge.
Jason Kupferberg: Right. Right. Okay. So we’ve got comfort in the 2024 volume outlook. It sounds like based on the take rate commentary, we’ve got comfort with the 2024 targets on revenue as well. So maybe, Nancy, just turning to margins, just as we think about the moving pieces for 2024, can you just go a little bit deeper into some of the areas of improvement? You touched on them briefly because I know you’re going to potentially have some drag from the recent M&A also, although maybe some cost synergies will be kicking in. Just trying to think how that nets out because I do think directionally, you’re expecting EBITDA margins to be up next year. Thanks.
Nancy Disman: I’ll start with your last point first, which is yes, I think the way that you phrase it is right. The synergy opportunity will be delivered pretty quickly and that’s why we put out the Appetize EBITDA number, right. So really just watching that turn from a drag to pretty quickly turning into an EBITDA opportunity, which is both sides of that equation that Jared talked about, it’s across all opportunities. But then, of course, there’s always expense synergies with any of these acquisitions that come together. I first say, I guess I first want to start with, like, look, I think these margins we’re delivering are best in class. So I want to be cautious again on not putting up too much yet on where we’ll be on a 2024 guide.
But we absolutely think there is margin enhancement in the near term that you’ll see when we do come out with that guide. The growth trajectory it’s just I would say I know I’ve been a little bit of a broken record about this. The union economics model right now that we’re operating under every single dollar of revenue is coming through at a higher margin. And that is what has caused this sequential margin improvement quarter-over-quarter that you’ve seen all year. And so, and I think if you look at where the margins are exiting, certainly that should be your starting point when you think about 2024 and beyond. The opportunity to continue to kind of manage a relatively flat SG&A base like you saw this quarter is really a reflection of every part of the operating model.
I could kind of go through each one again. But it starts with things that are like S&E, where we’re adding on ticketing, we’re not adding in SG&A. When we’re going up market, we have a much – the idea that we’ve consolidated under one SkyTab brand, right. That takes out just so much infrastructure and customer support. So it’s just really every kind of aspect of the growth model right now is producing a higher margin than where we started the year. And that will continue going into 2024. So I would say best in class today with room for improvement that you’ll see coming in with the 2024 guide.
Jason Kupferberg: Well said. Thanks.
Operator: And our final question will be from Jamie Friedman with Susquehanna. Please proceed.
Jamie Friedman: Hi. Thank you for the detailed results and commentary in this immaculate shareholder letter. I wanted to ask. So it looks to me like the math is that the implied blended spread for the fourth quarter at 68 basis points is up both sequentially and year-over-year, right. So 66 in the Q4 2022, if I’m calculating that, right. But more generally, maybe you could help unpack either Nancy or Jared or Taylor, how we should be thinking about why it is that the blended spreads would be rising again after they did fall in the third quarter?
Taylor Lauber: Yes, I’ll let Nancy kind of double click. I would just say we didn’t set an explicit spread expectation, and we do expect our SaaS and another line to grow sequentially quarter-over-quarter. So I don’t know that the pull through on 68 is an explicitly good read. I also don’t want to give one on the fly. So, Nancy, any more color you can give there?
