BILL Holdings, Inc. (BILL) Earnings Call Transcript & Summary

All right. It's great to see everyone. Welcome back. This is Tien-Tsin Huang. I cover the payments, processing, IT services sector at JPMorgan, and very delighted to have Bill.com. We just picked up coverage on the name. I've known John and the team for quite some time, well before they went public. They were nice enough to do a few events with us, and it's fun to finally have Bill.com at the tech conference as a public company on my side. So we're going to do fireside chat. I've gathered a lot of questions from the investment community. So we'll go through that. We'll take questions from the audience. We'll take questions from the portal as well. John Rettig, the CFO, thank you for being with us.

It's great to be here and been looking forward to this for a while.

We'll just dig right into it. So let's start with that, right? I mean, last time, I think I interviewed you or Rene, the company was private. A lot has changed between now and then. So I'll just ask an open-ended question. Why is now a great time to invest in Bill.com?

Yes. Great question. A lot has changed over the last couple of years when we went public. We were, call it, 500 employees, a $100 million in revenue. We wanted to get to the public markets to raise capital to invest behind this huge market opportunity that we're going after. And we've been executing on that since we've been public, north of 2,000 employees now, $600 million in revenue, growing rapidly, really strong organic growth. And over the last couple of years, we've expanded the segments of customers that we serve from really tiny businesses to mid-market companies and we've significantly expanded our platform in order to make it really sticky and increase our share of wallet with customers. So it's a really exciting time. There's been a lot of volatility, obviously, in the public markets and equities. But the market opportunity that we're going after is small businesses, it's as big as ever. And I think we're really well positioned to continue to serve that segment.

Agreed. Now we think there's a ton of potential to own that category. So -- but let's talk about the demand environment. I know there's a lot of questions on macro, just to get it out the way, John. So how would you characterize the current demand environment? And given some of the uncertainty, is it good, bad, indifferent for your business?

Yes. We see a really good demand environment. Going back a little bit to the beginning of the pandemic with COVID, I think it was a bit of a shock to the system for a lot of small businesses, and it did a lot to raise awareness about different ways of managing financial operations. And essentially our platform helps companies automate the way they do their financial back office. And so we've seen an elevated level of demand, increased intent, higher conversion rates, customers getting up and running faster throughout the entire pandemic. In fact, the last 2 quarters, the December quarter, we produced our highest ever net new customer adds at just above 8,000. This last quarter we were above 11,000. And part of that is being driven by our unique go-to-market ecosystem as well as just strong interest on the part of small businesses and going digital. So far so good, things look really good, especially with regard to intent and awareness in the segment.

Sure. So we cover some other bill payment like companies. We cover, of course, a lot of payment B2C companies as well and everyone is asking about inflation. And I'm sure the small business clients are dealing with that as well. So what are you hearing on the ground, John? And does this accelerate or maybe push out some of the sales cycle?

Yes. So we -- one of the benefits of having a large customer base, more than 350,000 customers, is we're collecting data and talking to them all the time.

Right.

And we definitely hear that inflation is creating cost pressures, predominantly in wages, but other goods and services in the whole supply chain ecosystem of small businesses. And that's where a platform like Bill actually becomes a bit of a counterbalance to the cost increases because most companies can automate their operations. They save headcount, they can grow their business without adding staff in the back office. So we -- in some -- at some level, we help with that on the part of small businesses, but it's -- I think it's a concern for everyone out there.

Yes. So you mentioned 11,000 plus that you added. It's a big number, above sort of your normal trend line. Are you seeing that already what you described or and is this number sustainable in your view?

Yes. We were able to get to that 11,000 in part because of our go-to-market ecosystem, which is direct to customers and upgrades from our network, partnering with accounting firms, more than 5,000 firms in the U.S. and then the FI, Financial Institution, channel working with big banks. It's really one of the things that sets us apart. Our ability to acquire customers cost effectively, grow our relationship with them over time and retain customers on the platform. So we're really happy with the results. It does reflect a bit of a step-up in customer adds from our financial institution channel. And I don't know that that's necessarily something we'll see every quarter. But we started out the year at the 4,000 to 5,000 net new adds per quarter. We increased that to 6,000. And on an ongoing basis, we would expect to be there or above in the near term.

Yes. So I think part of it, before we talk about monetization and the volume and all of that good stuff, John, I think as I remember talking to you and Rene and Rene's prior business, right, having relationships with accountants and, of course, banks means a lot, right? That's your funnel to bring in that flow. So where are you in building out the partner network, you've got a ton, you've got CPA.com, you've got a lot of accounts, you've got a lot of banks. Where are you? Is there still more room to grow on the partner side?

Yes. I think there's a ton of white space still. We've focused our go-to-market ecosystem with, if you will, on the trusted advisers of small businesses, like they turn to their accountant for advice, they turn to their banker. And those relationships are long-term. They don't change every month, every quarter. And so we've been investing behind both of those channels to help make accountants and banks successful in serving small businesses. It's not a competitive relationship. It's we cooperate to help serve small businesses, and we have a long way to go. We've made a lot of progress with large financial institutions. We have 6 of the top 10 banks in the U.S. There's many more. And in the accountant channel, I should mention, we're working with about 85 to 90 of the top 100 accounting firms, more than 5,500 in total. We've had a longstanding relationship with CPA.com. You mentioned them. They're the kind of the technology for-profit arm of AICPA. We've been an exclusive bill pay provider partner of theirs for more than a decade and we recently added our spend management solution Divvy to that arrangement as exclusive expense management, spend management and corporate card solution. So it's a bit of a statement about the power of our go-to-market ecosystem and how we're able to bring new products and in this case, new M&A activity, new acquisitions to our distribution channels in order to better serve customers.

Right. So as I'm getting into the rhythm of covering the name, what partner channels would you suggest that we focus more on? Is it harvesting the existing bank and accounting relationships or is the pipeline so big that there could be other step functions and change there? What would you encourage us to look at?

Well, the accountant channel for us represents about 50%, a little bit more than 50% of our customers, slightly smaller on a revenue basis. And the financial institutions that we've been investing behind those partnerships for years. If you go back a few years, it was low-single digits percentage of revenue. Now it's approaching 10%, 9% of revenue or so. So I think it's becoming a more important part of our overall model and can move the needle over time. I'd say with the relationships we have across accounting firms and financial institutions, we're touching potentially millions of small businesses. So our focus is really about driving adoption and penetration with these partners versus a land grab on more partners in the near term.

Right. So from a -- so, what does the pipeline for adding a partner typically entail? Is it a lot of effort and what was the duration of the time it takes to get something really fully loaded?

Sure. From an accounting firm standpoint, that's a little bit of an organic process. The accounting firms come to us and then we work with them through account management and relationship management to roll out our product to their client base over time. It doesn't happen overnight. It happens over months and quarters and it's sort of this annuity, whereas the accounting firm gets new clients. They leverage Bill.com and managing those relationships and helping them with their financial operations. In the case of financial institutions, it's a bit like a business development process really. It takes time to sell into the large banks, do integration and then drive availability of the product and adoption. And we've, in the last 18 months, announced 3 new agreements, Wells Fargo, KeyBank and Bank of America's small business, all of which are now in the early stages of the product being available to customers and starting to see adoption with a long way to go across all of those institutions.

Good. Yes. So still early on that front. So let's talk about cross-selling a bit. I know Divvy, you mentioned, is important, Invoice2go. So let's talk about those 2. Where are you in integrating those 2 deals and getting into the hole? Again the rhythm of cross-selling and going after it. I think it's hard for the sales to get going, but it feels like it's just starting.

Yes. We're really excited by the acquisitions. Obviously we did 2 deals in short order, only a few months apart. Divvy brought spend management, which is a whole category of spend that small businesses have that we didn't really serve before. And then Invoice2go is a mobile-first AR product that Bill.com has had AR for a long time. But this mobile capability to serve small businesses is really great. So across the acquisitions, it's really about integrating people, the underlying technology and products and then the go-to-market. And we've made substantial progress across all of those fronts. The people integration is completely done. We are one company. We have multiple solutions. And in some cases, we're still using multiple brands. But our vision is really a one-stop shopper, an all-in-one solution for companies to be able to manage the whole lifecycle of their financial operations, whether that's submitting quotes in the field, invoices, payment-enabled invoices, getting paid quickly or on the AP side of things, driving digitization and financial operations and/or better visibility into spend in order to frankly save money over time and create more efficiency with the AP process and that's where Divvy comes in. We said after the close of the acquisition of Divvy, we thought that we'd make progress in fiscal 2022 at driving awareness and initial adoption across the Bill.com customer base. We still feel really good about the progress we're making there. We think order of magnitude, 50% or so of the Bill.com customer base is a candidate for the spend management solution from Divvy. And once awareness is made, we drive adoption over time. These customers then start to move spend and it becomes a part of the platform, which is something that takes a number of months as companies change their behavior. So we think FY '23 is when we'll start to see the financial impact of the cross-sell activities that we've engaged in so far.

Okay. Good. So Divvy, a company we knew reasonably well before you guys bought it. It's a very competitive category in spend management, I think, Brex, and Ramp and others, people have mentioned. So what attracted you to Divvy? Why is that asset a good fit for Bill.com?

Yes, we land -- surveyed the whole landscape of providers in the spend management category. It was new for us and we interviewed a ton of customers. So one of the -- again, a benefit of having a large customer base is they use lots of solutions. And the spend management category was an adjacency for us. So what we learned about Divvy, first and foremost, was that people love the software. It's not just a card. It's not just rewards or incentive. It's a way to get better visibility and control over your business. To their go-to-market is horizontal, just like Bill. So it's not focused on, say, an industry vertical or a certain geography. It's across all businesses, all segments with very little industry vertical concentration. And third, Divvy, even prior to the acquisition, had made great progress with underwriting customers. So it's a charge card, not a revolving credit card. It gets paid off every 25 or 30 days. It's actually 10 days on average from a cash flow standpoint. And that's a really important capability as we think about other products that we could bring to the small business customer segment to understand them. We're now leveraging Bill.com data in that underwriting process, we have one risk organization. And so I think Divvy was way far ahead of anyone else in the market with that underwriting capability, combined with the software, I think, creates a really unique solution.

Good. And I know we get caught up in take rate sometimes, John. But with the economics of Divvy and we've learned that rebates, incentives and of course you want to encourage the installed base to use the product. So what's sort of the underlying economics of Divvy and how do you see that trending over time. There are really good people to use it.

Yes. First and foremost, we sell software, like that is our reason for being Bill.com, Divvy, Invoice2go. We monetize with payments. So there are players in the market and certain customer demand that we see for just incentives. It's about a charge card access to credit and rewards, not the intent of changing the way they operate their business. Those are not good candidates for Bill and Divvy. It's really about driving process automation because of the competitiveness in the corporate card market for businesses, incentives and rewards are a have to have. It's just a part of the model. And what we try to do is differentiate our offering on the basis of the software solution, more visibility, more control. And we be as competitive as makes sense for us as it relates to the rewards, but we don't lead with that. And we're really happy with the economics on the business. We've made a lot of progress in improving the economics since we've owned them. You've seen a significant expansion in the gross take rate from Divvy since we've been a public company. And so I think we're -- we feel like its additive to our financial profile, not just from a growth perspective, but from a margin perspective also.

No, it's very lucrative. So to be clear, right, it's more about the software, automating the workflows, making life easier for the SME, right, to manage that as part of everything else you're doing with Bill.com?

That's exactly right.

So on the payment monetization, big theme in payments because I'm a dumb payments analyst, is all about monetizing through payments, and you just talked about it with Divvy. So where are you? Or how would you encourage, same question I asked you before, sort of track this whole monetization effort across all of the spend under management for Bill.com? Is there a simple top-down way to look at it?

Yes. First, let's go back to -- we've been building new payment products. Divvy and Invoice2go are part of that, but even organically, in order to have more offerings available to SMBs because that increases our share of wallet. The more they manage inside of our platform, the stickier they are as a customer. They end up relying on our solution as a utility. It's how they run their business as opposed to something that they decide to use 1 month and not the next. Because we're applying it to AP and AR, that's what opens up that monetization opportunity. We built the business, if you think about even the pre-IPO days, predominantly on subscription fees and flat rate transaction pricing. So per ACH, per check payments. And in the last 2 to 3 years, we've started to roll out more products that monetize on an ad valorem a variable basis. And we're really just getting started with those products. Our last reported penetration rate on virtual cards was a little above 2% with a longer-term goal of 5% to 10%. International payments was a little above 4% with a longer-term goal of 10% to 20%. We rolled out real-time payments, which is a very interesting product that monetize as well, but it's for a small supplier versus a virtual card payment that might be for a larger supplier. Bill.com Balance enhance ACH, pay by credit card, if you want to fund transactions differently. These are all products that we've talked about in recent quarters that are still at the very beginning of that monetization lifecycle. So I think we're setup for, over the long-term, significant expansion and transaction monetization.

Yes. And just to follow on to that. Thank you for giving the potential and where you are with penetration. But there's always this push-pull between AR and the AP side, right, to minimize cost, to maximize savings? So is education a big role that Bill.com plays to really drive that monetization? How do you actually make it happen?

Yes. It's a great question. And I think it -- we're a little bit different than some companies who focus on the payment space. We try to drive repeat usage. That's our goal with payments. It's not a monetization goal. So we want to find the right payment method between buyer and supplier. So that includes lots of factors. Cost is just one of them. How much data is being passed with the transaction? How easy is it to reconcile the transactions? And ultimately if it's the right payment method, we see the transaction recur, it repeats. Approximately 80% of the payments that flow through our platform are repeat transactions. That means the same supplier and buyer have done a similar transaction within the prior 90 days. It's not one-off transactions. And we try to reduce friction in helping suppliers and buyers pick the payment type because friction could result in the transaction going off of the platform. So at the end of the day, if there's a choice in the customer or the supplier doesn't care, we'll end up with a higher monetizing transaction. But we don't force that because we want it to be ultimately a recurring transaction for a long time. So we try to reduce the friction because you're right, there is tension sometimes. But ultimately, we get to the right transaction type.

Got it. It will self-solve. It will keep the natural. So building on that, when I think of Bill.com, it's you lead with the AP side, famous on the AP side, but you've got elements, of course, and historically on the AR front. So the importance of owning both sides and being in the middle, John, is that a big priority? And does that open up a lot of different new paths to grow? Or is that more just a natural evolution for the company? Just trying to understand the balancing act between AR versus AP?

Yes. For us, it's important to have both. We've been one of the few companies that's tried to address both AP and AR automation in the back office, granted AP has been the vast majority of our volume and revenue and economics in the business and AR has been much smaller. The Invoice2go transaction we did that closed last September really changes that game because it's a great product. It's a scale customer base with 200,000 customers. And we think that one of the biggest opportunities from that transaction beyond just cross-selling to Bill.com customers, driving more payment monetization, which is something we've talked about, is actually enabling the Bill.com network via the Invoice2go AR solution. So we have a network of individuals and businesses who are touched by payment transactions. They're either making a payment to one of their customers or they're making a payment to a supplier, whatever the case may be. And we built that predominantly as a freemium model. So network members didn't use to pay anything for a transaction. We've added many more choices and payment capabilities, and that's allowed us to start to monetize the network. And we think the next leg of that monetization is really driving the AR product through the network.

Right. Right. And so from a competitive standpoint, John, I mean, because you have this head start, I would imagine SMB system, they don't want to have a second or third sort of partner for this. Is this -- is it too strong, let's say, this provides lock-in in terms of building up to scale and getting to a much bigger number with touching SMBs?

Well, we have seen a positive correlation between the number of products that we offer and the share of wallet that we tend to get from our customers. And we think the higher share of wallet, the more of their financial flows and processes and workflow that are being done in the platform, the stickier their platform is. We have great gross retention and dollar-based retention as it is. And I think the more the breadth of the platform expands, it just increases that opportunity for additional stickiness.

Yes. Fair enough. So thinking about the network and the build, SMB is the core, but extending into mid-market. And of course, you're touching a lot of suppliers. Is the ceiling moving up in terms of the type of -- or the size of client that you can serve?

Yes, it's probably one of the biggest changes since we've been public is how much are the customer segments that we serve have expanded. We talked about Invoice2go, which are the micro or really small businesses. And then we've seen a ton of demand from mid-market companies. We define micro as a $1 million or less in revenue, the businesses revenue, a small and midsized business as $1 million to $10 million and then a mid-market as $10 million to $100 million. We have lots of customers that are larger than $100 million, but that's not a focus. So we're not moving to mid-market as much as we're seeing demand from these larger businesses because our solution works really well with the ERP systems that most mid-market companies use. So the Microsoft Dynamics, Business Central, NetSuite, Intacct, things like that. And so it's a really big market opportunity. We still have a horizontal go-to-market approach though. So we're not going to customize the product, our platform for any one vertical that a mid-market company might be in because we think most businesses, their needs are like 80% the same. They might have 20% unique needs based on a vertical. And so we're continuing to support growth in the mid-market segment. The ARPU of mid-market customers, many multiples that of a small business. They tend to have a much higher payment volume, as you can imagine, and a much higher percentage of their volume actually happens with international payments, which that being integrated into our platform now creates a really interesting monetization opportunity.

Good. All right. We've got -- time is moving here. We've got 12 minutes left. So I had a couple of questions to ask you about profitability. So let's shift to that. I know there's amazing growth ahead of the company, but the market is increasingly focused on profitability. So where are you in that trade-off of growth versus margin, John?

Great question. I think of it more as a balance than a trade-off. So we've been a high-growth company. We've expanded gross margins consistently since we've been public. We have very minimal non-GAAP net losses. And we've really been investing for disciplined growth since we've been public. We don't chase every dollar of revenue growth. We have a short payback period, less than 5 quarters. And we think that's a very efficient way to deploy capital. With that said, we are committed to running a profitable business over the long-term. We haven't set out the timeline for that yet. But if you look at our overall profile of the business, $600 million in revenue, $40 million or less in non-GAAP net loss, $1 billion in net cash on the balance sheet. We have the liquidity and the resources to continue to grow the business, and it's not much of a stretch when you think of the cash it would take for us to become profitable.

Yes. No, it's good. Pursuant to category and it does make some sense. You mentioned ROI. Is the ROI hurdle the same when you think about inorganic versus organic investments?

It's a good question. So we think there's lots of opportunities in the inorganic acquisition space in the quarters and years ahead, frankly, especially with the market correction. But every priority that we have for building out the platform, bringing new payment products to bear, we look at whether we should build organically, partner with a third party who's already got a solution that we can add value to or acquire. So I think when we look at acquisitions now, and we see lots of opportunities, there's probably a whole another lens on the financial profile and how it contributes to our margin expansion and profitability more so than, say, a couple of years ago when we were much earlier in that scaling phase. So that's something that we're still working through. There's lots of categories that are of interest to us. But it's along the lines of this build, partner, buy methodology that we have.

Right. And one more and we'll open it up to questions, just to build on that. Also just the whole breadth versus depth concept around acquisitions. Is it -- should we think of more Divvy and Invoice2go like M&A or is it more important to maybe add some depth in some of the areas that you're in already?

I'm not sure there's a recipe for that at the moment. We will be opportunistic. But the things that are closest to the platform, like the core competitive differentiation capabilities, those are things we want to own over time as opposed to there's some commodity products, maybe a certain payment rail that you need to connect to. That if somebody's already got it, we're going to take the lease cost route to get to that solution rather than having to own it because it's a commodity. So I would think of us as continuing to build out our platform, both more payment products which means like the vertical expansion as well as more use cases for customers, which is the horizontal and it's in that horizontal expansion of the platform that we're more likely to look at M&A opportunities versus building out on the payment side.

Okay. Good. I have a couple of questions here. Happy to take some from the audience. If you don't -- if that's okay, John. Here's a mic here, if you don't mind waving for that. Thanks.

Question about maybe monetization, which was a big part of the conversation so far and maybe the current environment. If you look at kind of the drivers of your legacy Bill.com monetization, just at a really high level, take rate expanded 3x in 2 years. You kind of outlined the current penetration for real-time payments, cross-border, virtual card, which are big drivers of future monetization, only being penetrated 20% of what they can be. Question for you there, is this not an environment where there's stress on customers, there's more demand for faster payments, maybe even more curiosity for customers to go outside their home market, it's cross-border. Is this not an environment where you could see accelerated monetization between those drivers of your payments monetization?

Yes. Thanks for the question. We take a multiyear view of the opportunity to expand monetization by driving adoption. Adopting a product on behalf, whether it's a supplier or a customer, requires a behavioral change. So it doesn't happen overnight. We learned that with international payments, where we saw our U.S. customers paying suppliers that were outside the U.S. We had that data. It's part of our data asset. We launched the product and we're seeing the behavior change, but it's not overnight. So I don't -- we don't have a view of is it going to accelerate this quarter or next quarter, but in the environment that we're in and with how early the market is in its evolution and us driving adoption of these payments, we see a very long runway to continue to expand. A few of the products that I've mentioned are not even 100% available to our customer base. So whether that's paid by your credit card, Build.com Balance, enhanced ACH. So those are really at the very beginning and we haven't even rolled out target penetration rates for those.

Thank you for that. Right here.

Thank you for your time. Historically, a lot of your -- as you mentioned, your competitive advantage has been the ability to acquire customers at a low acquisition cost, given your channel partnerships. How do you see increasingly Intuit has been working on building their Bill Pay capabilities and they've been rolling it around a long QuickBooks Online and QuickBooks Desktop? How do you see your competitive advantage against them given that they have some of the similar channel relationships that you have?

Sure. So we're partners with Intuit. We have been for a long time. First, at the API level to enable sync between our platform and QBO, just like we do with Xero, NetSuite, Intacct and a bunch of other ERP systems. We've also worked with them on both the micro businesses and now more recently with QuickBooks Online Advanced, which is their version of mid-market, 1of their top 5 corporate bets. So we have a long-standing partnership. We view ourselves as a complement to accounting software as opposed to a replacement just like with financial institutions. We're trying to help partners in the ecosystem better serve SMB customers. We started in business with an idea to automate a really messy, complex process. So we don't start with payments. We don't start with just collections on the AR side. It's about changing the way a company operates. And we think there's a huge market opportunity to do that regardless of Intuit's specific near-term priorities or ours. So we're super happy with where we're positioned.

A quick question just on go-to-market. Given that brand awareness is very important in the smaller tier of SMB, can you just talk about the strategy of maintenance of multiple brands in the portfolio versus just simplifying behind one arrow, if you will? And then relatedly, especially as buy and build continues to be part of the story. The technical integration, can you talk about the process and the timelines there? Do you maintain multiple code lines behind these multiple brands? Or are you going to have a more efficient single code line suite backing these up.

Great. I'll start with the second question, which is the technical integration on the acquisitions. And we go through a diligence process before. Obviously, we've just done 2 acquisitions so far. But the compatibility of the architecture and the underlying technology is critical. So we're -- our vision is one platform, one infrastructure layer down the road. So we expect to fully integrate both the technology and the customer base and go-to-market platforms and not operate independent products. As it relates to the brand, it's a great question, especially after having done 2 acquisitions, both of which have very good brand recognition within their customer segments and we value that. We are going through a brand architecture process to identify what our maybe next level positioning for Bill will be. Bill also has very good brand recognition, particularly in the accountant space, where we've been working for more than a decade to help accountant support their businesses. So there's more to come on what our strategies will be there, but we fully recognize the value and the brands that we have and the complexity in managing and growing multiple brands over time.

I was wondering if you could speak to the international opportunity. Right now it's mostly domestic from what I've seen and just the plans to go international.

Sure. Our first sort of small step towards international was understanding the suppliers that our U.S. customers were paying outside the U.S. We gathered that intelligence through our international payment product. Then we purchased Invoice2go. They have a base of operations in Australia, so it's not a global footprint, but they have customers in a 150 countries. And those are self-service customers. They're acquired via the app store. There's no sales motion or cost that goes into that. And lo and behold, we found that those -- the concentration of Invoice2go customers overlaps very nicely with where Bill.com's U.S. international suppliers are, U.S. customers. So it's -- we're still developing our go-to-market strategy and it might not be one-size-fits-all. It might be a different approach in different markets, but we would expect some of the English-speaking countries, Canada, U.K., Australia, New Zealand would be the obvious places for us to consider expanding to.

Great. Let's do one last one and then we'll close it up.

Just a question on the quarter. You know, it was a significant net adds. You just talked about 11,800. But the TPV kind of Q-o-Q was slightly lower organic transaction revenue, kind of a little bit lower than what you saw in the kind of Q3 of the last year. I guess, what I'm trying to understand is how to think about if your net adds are coming, inorganically coming through SI partners? And how does that impact your transaction growth, TPV growth?

Sure. Yes, the TPV in the quarter grew north of 50%. It was down 2% quarter-to-quarter from the December to March, which is what we were expecting and what we indicated in our February call. I would think of the new customers as driving volume, whether that's spent volume or revenue volume, mostly in the next year. About 80% of our revenue in any given fiscal year comes from customers that existed prior to the start of the fiscal year. And the reason for that is the change in behavior that needs to happen as customers use the platform, they need to get invoices ingested or invoices sent. They need to get approvers setup in the system. They need to collaborate with their suppliers. Ultimately that leads to transaction flows and a high share of wallet and TPV growth, but that normally come, and revenue growth, that normally comes a few quarters down the road after we acquire a customer.

Good. Thanks, everyone, for the questions. Let me ask one more, just to get you out of here, John. Just with the stock coming in quite a bit, company morale, how are the employees doing and what do you think is misunderstood? I always -- that's my go-to question. What's sort of misunderstood, you think, at this point in the stock from the investment community?

Well, starting with the employees. We're a mission-driven company like everybody cares about what we're trying to do for small businesses and that's an important bond that we have across the company. And I think we've done a great job at growing the employee base. Everybody is still committed. And I'd say we have a really big network opportunity as a company, as you think about AP and AR coming together across a large number of payment products and that's something that we'll continue to work to educate everyone on.

Good. Thank you for the time, John. It's great to see you.

Thank you.