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

Yes. So thank you. This is the BILL session. My name is Tien-Tsin Huang. I cover the Payments and IT Services Sector. So glad to have BILL back with us Rene Lacerte, Founder CEO of BILL; John Rettig, President and CFO. I'm going to go through a list of questions that I've gathered from investors. And hopefully, if we have time, we'll take some questions at the end. But I think we'll cover some the main issues that are on top of everyone's mind. But thank you both for being with us.

Thank you. Thanks for having us.

No, it's always great to have you. It's always something to learn and ask about. But Rene, maybe just to kick it off, I think I may have asked you this before, but I'll ask it again in this setting since you've seen a few cycles and you've led businesses through those cycles. I'm curious to get your perspective on what you've learned about SMB and their resilience. I think we've discussed that in the past, but maybe you can share it with the broader audience and how the current cycle compares to the past?

Yes. I appreciate the question. And I think just some context one of the things I've learned through the cycles is that you do not flinch, you do not get distracted from the mission of serving customers and making a difference for them each and every day. And so what I've learned having grown up in SMBs, my parents, grandparents were small businesses. I've started a couple. I've definitely served my whole life supporting SMBs is that they are very resilient. They find ways to make things happen. They wouldn't -- if they didn't actually have that characteristic, they wouldn't be able to start their companies. And so they are acting as they know best and that is they're founding ways to get things done. If you think about the impact that we've seen over the last couple of years, we've had COVID and supply chain constraints and businesses have reacted. It's been uncertain. But when that happens, they innovate on their processes. They manage their cash more closely. They focus on their mission for their customers. And our platform enables them to do of all. That's one of the things that we feel really good about is that our platform enables businesses to save time. That's 50% of the time it takes them to manage their finances. It manages the ability to give them context so they can actually decide bills to pay and which ones not to pay. That creates cash flow. So the most important thing a business has is their cash flow and how do you create that leverage. And the tools we have with insights and obviously, AP and AR and spend and expense, we have an ability actually drive cash flow. And we're doing this across 0.5 million customers approximately and 7 million across the network. So lots of opportunity for us in any environment stay true to the mission. But I think the main thing I've learned through these cycles is that you have to stay focused in these cycles and not get distracted by the noise that's out there. And so that's [indiscernible] -- that's staying focused on what you're out here to do, which is to make an impact on SMBs.

Good. Perfect. So thinking about demand then for bill services around and bill pay, spend and expense and everything you just discussed there. How would you characterize that given what you've observed so far year-to-date, any change in sales cycles or maybe the pitch that your sales team is going out -- going out with?

Yes. No, I mean, we've seen consistent customer acquisition for probably 4 to 6 quarters -- more than 4 to 6, probably 8 to 12 quarters, right, which we've said is somewhere in the 4,000 to 5,000 customer range for the core APAR platform and somewhere around 1,500 for the spend and expense. And we've been consistent in those ranges. What we see is an opportunity though to double down in certain areas of the business. And so one of the areas that we've doubled down and is our accountant. So our accounting firms, we have 9,000 firms across the country. We are the leader when it comes to helping accountants develop their cash practice to client advisory services practice. We've been doing this since the beginning with CPA.com, the division of the ICPA. And we're doubling down to help them do more right now. There's more opportunity with their clients are asking for an opportunity to actually leverage technology to actually be more efficient so they go to the accounts. The 9,000 firms, they come to us. We built new tools and platform capabilities, which we'll talk about, I'm sure. And what that results in is that our accountants over the last year, net adds are up 60% in the given quarter. So that doubling down is working. And the other place we're doubling down is where we're being pulled upmarket, right? So the larger customers in the BILL platform, whether they're mid-market or lower mid market, they're using the platform. They're getting a lot of great success with it. And now they're saying, well, what if you could do this for me? What if you could do that for me? And that's going to enable us to actually develop all the capabilities we did with multi-entity and procurement. And that's going to allow us to go actually reach out to new SMBs and lower market customers that aren't on the platform. So nothing's changed in our go-to-market ecosystem other than continuing to just refine the motions that we have and what we see is strong success in accounts and strong success with the outbound efforts with the lower mid-market.

Okay. Good. So adds are consistent for both core and the spend and expense. And let's just quickly talk about TPV then spend trends. I know you and John. John, you talked about sort of the observations you saw. What changed from the most recent quarter from the prior quarter? And what trends do you see on the ground today?

Yes, it's obviously a little bit more uncertainty in the external environment these days. It's interesting that SMB on average, though, are larger, financially healthier and better equipped to deal with uncertainty than, say, prior to the pandemic. At the same time, they're reacting. They're starting to adapt to some of the unknowns that are out. They're a little bit more wait and see than previously, certainly not in full expansion mode. And we've started to see that show up in some of the trends. In the third quarter, we saw slightly lower TPV per customer, about 2% down year-over-year, about 0.5% if you adjust for leap year, but still down just a little bit. And then transactions per customer, a similar story. So down slightly on a year-over-year basis, even more so than the seasonal effect would indicate. So there's a few categories of slight pullback, things like wholesale trade, real estate, construction, where there's definitely more of a pause mentality going. On the spend and expense side, we've seen much more resilient, strength in travel and entertainment and other categories that continue to hold up well.

Good. No, thanks for going through that. I don't want to spend too much time on the macro. I know you guys see so much data, but I did want to hit a few big picture subjects, if that's okay. So maybe back to you, Rene, on the industry consolidation question. We've seen your peer AvidXchange go private. Mastercard, I talked to earlier today, talked about their investment in Corpay for cross-border high-ticket bill payments. Paylocity bought Airbase. Does this surprise you at all? Or does that change your -- maybe your sense of urgency to act inorganically?

So I don't think it surprises us. I mean we define the category. Day 1, I thought and understood that this was a massive need that SMBs had, that they needed an opportunity to automate their financial operations. Everybody was ignoring them. People weren't paying attention to what they needed. People were just developing solutions that they thought they needed. And having been in SMB and grown up around SMBs, it was pretty easy for me to see what was missing. And so we define this category. And so when I see other people coming into it and thinking, "Oh, well, that's interesting. Like, well, no, it's definitely interesting. That's why I'm here. And so when I think about what we're building, we're building something much bigger than I think when I see anybody else trying to do. We're building a platform that enables us to complete automation of financial operations, and that leads to everything from better insights, to better cash management, to save time. Like these are things that businesses need. And we've been building a platform day 1, that's purpose-built to do all those things and nothing will distract and deter us from that mission. The platform we've built, I just think about the scale that we have, we have unique scale that nobody else has, hundreds of billions of dollars moving through the payment rails of our company, 1% of GDP managed from a risk perspective very efficiently and effectively, and nobody else has that. We're sending billions of dollars in international payments. We're doing billions of dollars in card payments. We have tens of billions of dollars on corporate spending programs. Like there is nobody that has unique assets have to actually go after this market aggressively and assertively with conviction that this is what SMBs need. So I think when I see news like this in the market, it's like, yes, I knew it was interesting. This is why I started the company. It does not change at all how we think about going after it, because the opportunity is just that big. It allows us to think about building our platform for scale, so we've done acquisitions in the past. We'll continue to think about that going forward, how do we continue to expand the capabilities, whatever adjacencies may make sense for customers. And this will put us on a path and we're already on this path to be multiple billions in revenue. So when we crossed $1 billion, I started thinking about what does it take to go from $1 billion to $10 billion. And so the focus has not changed. And in fact, it maybe does intensify, not because of the market, but because the opportunity at hand is just so great. The other reason that some urgency comes in, and we'll talk about this later, is just the opportunity to leverage AI and how can we accelerate customer adoption, how can we accelerate efficiencies in the business. These are all things that we can do. And once you know that you can do them, then you should go do them, you shouldn't wait. And so I think that part is true, but I think the overall consolidation is just, in some ways, it's interesting, but it's not really anything that we think about because our opportunity is just that big.

Okay. Perfect. I do want to talk about AI, and all that good stuff, but I do want to just follow through on that. Rene, I think you've taken a long view, we agree, right? You've defined the category and you're in the pole position right there with you thinking about it that way. But the B2B group from a stock standpoint, it's -- they've struggled, right, post the pandemic boom? I don't think that's debatable. The cyclicality questions, monetization questions have come up and it's something that we've learned. So my question to you is it more structural or cyclical versus secular, right, is the question? Or have we misunderstood or misjudged expectations? How do you see it?

I definitely see the challenges in B2B is being cyclical. And really just step back and share kind of my experience, I guess -- and I was born into business. And I saw my parents and grandparents built lots of businesses serving lots of SMBs. And that gives a unique perspective of understanding the fire that's in the belly of every SMB, right? You don't go business unless you want to win. You don't take that risk. You don't take that financial risk. You don't take that personal risk. You don't take that ego risk. I mean there's a lot of risk that you take when you start a business. And so the fact that they started a business and now there is some noise on the outside macro isn't going to deter them either. They're going to be very focused on pursuing their mission and achieving what they want to achieve for the world. And so I see the cyclical nature of like we haven't seen this before. COVID was something we haven't seen, right? Supply chain, $10 trillion in stimulus. I think all of us can look around and be like, okay, that was probably too much. We could debate what was the right amount should have been. But $10 trillion is stimulus, that's just a crazy amount that inflated supply chain. Nobody expected that. And so that created a problem. And so -- and now you've got the uncertainty from policies around trade that are creating some unknowns for businesses. And so what I've learned about SMBs is when there are unknowns, they focus on the knowns. What can they control? What can they focus on? And so to me, that's why we think it's cyclical because we look at our data, still consistent customer adds, right? We're adding the same number of customers. You would think maybe macro would impact that. It does not. Still roughly the same number of payments, right? We have 1 or 2 less payments this quarter, which we -- last time we saw that was when COVID hit. That's a macro thing. That's not a structural thing. Still consistent usage of our platform across all payment types, increasing ad valorem on the emerging ad valorem products, right? So that would be the invoice financing, the instant transfer the pay by card. These products are growing in their adoption. So we continue to see all the things that we put into the platform, continue to grow, still increasing opportunities with international payments. And we think as the friction to card payments abates, which card payments often have cycles of friction that will also be something that will be in the past and not necessarily anything more than just a dynamic in time.

No, I agree. Thanks for going through that. And look, it's a long cycle game, and I don't want to get too caught up in the short term. But I did -- we did appreciate the way we wrote it up was that taking matters into your own hands. You're not waiting around for the cycle to improve. You're investing the $40 million to accelerate growth. Can you just give us a progress report on that? Are you getting the returns you expected? I know the goal was to get 20% growth next year, is that harder given what we've seen in the cycle?

I'll start and then let John add some more color. So I mean, if you look at what we've done to date, we've actually delivered on each that we said we were going to hit. We had to make some adjustments, we said for the fourth quarter based on where we saw the macro. And so I would say that our investments are acting as we expected. There's now a new uncertainty from the macro that we needed to factor in. So anything else?

Yes. It feels like we're making really good progress across the investments in 4 areas, focused on payments, suppliers, doubling down on accountants and our embed strategy. We'll come in a little bit below that $45 million for the year, just based on timing throughout the year. But with these investments, the important part is it gives us more levers to drive growth going forward. Some of these will materialize fairly quickly. IP local transfer allows us to get international payments wallet share quickly. Supplier solutions like enhanced ACH and working capital products allow us to monetize quickly. Doubling down on accountants, you've already seen us start to scale accounting net new adds. Some of the other investments will take a little bit longer to mature and have a material impact on our model, things like stabilizing virtual card payment adoption growth, driving more card adoption across the whole platform, our embed strategy to reach the long tail. We're really excited about these, but they're probably 1, 2-plus year initiatives before they provide material growth. At the same time, regarding the 20%, we are really confident in our ability to reaccelerate growth in the business. When we look at the investments we're making in '25 combined with leading platform, our unique distribution ecosystem, we feel like we have the levers to drive accelerated growth. Things are a little bit different today than a few quarters ago, though when we established the time line and that target of 20% growth, there's a little bit more uncertainty, how that's going to impact SMBs is still playing out. And so we're confident in reacceleration, but it's a little bit less clear the time line for that. And I think over the course of the next couple of quarters, we'll know a lot more about how SMBs are reacting to the environment. And we'll obviously have details to share in August around our FY '26 plan.

No, all fair. All fair. Thank you for going through that. So quickly, just staying with what you mentioned a little bit there, John, just the playbook to drive the take rate expansion from some of the efforts around your investments, focusing on the supplier. I know there's been some pricing changes as well. But just give us a little bit more on how that builds up?

Yes. So we think of it in a few different dimensions. One is scaling existing products, driving adoption through product motions and human sales motions, launching new products for customers and suppliers. As we introduce more solutions, we typically drive better adoption. Better adoption, some of that flows to ad valorem payments. That has a positive impact on take rate expansion. We're seeing good growth with S&E that's going to impact our business overall, not just the S&E card product as we do more volume with AP card on the Bill core AP platform. And we talked about some of the enterprise supplier solutions enhanced ACH, which we think that's going to be an important value-add for suppliers and also introduces a new ad val product for us that stepping back, 70-plus percent of our volume is ACH and check payments. And we think a significant piece of that can be addressed through an enterprise supplier solution like this. So I think tens of billions of dollars that are potentially at play moving from a low monetizing fixed fee payment to an ad val payment. Looking ahead, though, and that's just about payment take rate expansion. Looking ahead, we're also investing to diversify the business model, though, so that take rate expansion and transaction monetization is one component of a diversified algorithms. So expanded use cases on our platform, enabling customers to do more. We have recently talked about procurement, multi-entity batch capabilities that opens up a larger subscription lever. Working with larger customers, that expands overall ARPU. Obviously, we talked about the payment enhancements to increase take rate and then finally, working capital products, which is a complement to everything we're doing at the transaction layer for customers. So when we step back and look at maybe over the intermediate term, all these things together provide a pretty significant growth lever for us.

Okay. Good. That's a good summary. So I know you mentioned a product, BILL typically introduces a couple of new payment products a year. How does advanced ACH rank relative to some other launches? And what else would you get us to hone in on in terms of what might impact the P&L in terms of new P&L product?.

I'd say the 2 that are top of our list would be this advanced ACH product. And think of it as a category. We're talking about 1 unique product right now, but there will be multiple that spin out from this. It's a lower priced, lower monetizing product than, say, some of the highest variable price solutions out there, which means it will have much broader appeal. It will address a much percentage of our overall payment volume and be a catalyst for growth in ad val payments for years to come. The second is also a category and that sees working capital solutions, where we know that we're uniquely positioned with our platform, our unique data and context that we have, understanding both buyers and suppliers, the relationships, the connections, the transaction details. We're uniquely positioned to underwrite and manage the credit exposure, and that will be a big driver as well.

Okay. Good. So I do want to talk about some of the other products. But let's do tech and bring it back to AI if you don't mind, Rene. just thinking about the AI investments. We talked about it a little bit last year. And I know it's come up on the call, but we've been asking the question of productivity and costs from AI enhancements versus growth benefits from AI products and solutions as you extend it externally. What are you excited about specifically for BILL in AI?

Yes. I think when I step back and think about the impact of AI just on anyone's job, anyone's role in society, the game-changing aspect is going to be an unlock for creativity, right? So when the mundane task are removed and somebody can actually think more thoughtfully about the rest of their job, that's going to be the unlock. And you think about what we do for SMBs, all day long, we're trying to create unlocks for them. SMBs wear so many hats, like when you really understand the challenges they have, like they're just trying to do everything to move their business forward. They're trying to be a dad, a mom, they're trying to raise their kids. They have challenges because at work they don't have just 1 hat, right? And so the unlock that's necessary for them is massive. And the way we think about it is, if you think about a Fortune 500 company, Fortune 1000 company, there are jobs in the finance teams that actually go after AP, after AR, go after treasury management, go after collections, go after reconciliation. There are whole teams dedicated to these jobs. And what we see the opportunity to do is to leverage that data and the unique asset that we have to go after creating agents, if you will, that will be the finance team for the entrepreneur that's doing something at night after the kids have gone to bed. And so the approach that we're taking is like really leveraging the 2 unique skills that we have. Those skills are, one, we have a great understanding of SMBs. Everybody in the company is passionate. We're champions for SMBs. We think about what they do, what they need every day, and we have been doing that for a very long time. So we have a unique skill set to understand what those jobs are, how they do them they need from us. We've already provided a set of tools that allows them to do some of those things, right? So I would say today, what we have is a do-it-with-you approach, where customers are able to actually get support doing payables, receivables or spending expense, their cash management with tools for BILL. But as we roll AI into the capabilities of the software experience, then you get to an opportunity where it's a do-it-for-you approach. And the human in the loop is still the entrepreneur, the SMB, the CFO at a mid-market company, that, that human is able to kind of get much better served up information based on the context of the data. So 2 things we have one is just that deep experience. The second is the data. And the data that we have, it's not just the scale of the data, like the 1% of GDP that goes through BILL that we manage from a risk perspective that nobody else is doing at that level. There's that size of it, but then it's also the context. The reason we're able to actually do the 1% of GDP, the way we do because we have very rich content data underneath the platform. So that content would be the context of any transaction. So we just don't have who you pay, when you pay and how much. We have all the details on what that transaction is made up, we have the detailed line items, for example. We have the workflow internally, who approved it, who paused on it. All those things are something that we have. And so when you combine that deep passion for SMBs and understanding -- an expert understanding that we have with the deep rich data context we have, we are in a position to build agents and ways to help go after those jobs that traditionally would have been jobs that finance teams and Fortune 500 companies had people dedicated to and now the SMB can have somebody dedicated to it in an agent. So super exciting on that front. And then the second part of your question would be internally what I'm excited about. And this is unlocking the creativity of employees. And so when you think about all the capabilities that have really developed in the last 12 to 24 months, there are so many more tools today that can be leveraged to help whether it's customer facing, that could be sales marketing or customer support or development, which would be obviously engineering and QA. There are so many more tools that we are leveraging and will be leveraging in the coming year to really create more efficiency so that our employees can be more creative about those agents that we want to go develop for the SMB. So I think it is a pretty interesting time to be a software developer. And one of the things that I'm super excited about is I do believe the increase in efficiency that we will get in the customer experience will be the next call to adoption, if you will, by SMBs. So we say them today 50% or more at the time it takes to manage our finances. But imagine when you can really drive that because of the agent capability and give them something they never had before. That will be another significant call to adoption, and we're looking forward to completing that and being a part of that revolution.

So Rene, are you investing in this today in terms of the agents? Are you constrained in any way because you've delivered on the margin expansion that you've called out. But given what you just described, do you -- are you able to invest what you'd like to invest to get to where you want to be on AI?

We are investing where we want to be right now. So I think one of the challenges that anybody should be thinking about is there's -- I'll give some story. A friend of mine's wife started an AI company 3 years ago, and she sold that to go start another one because you already had tech debt. And so there is this amazing speed that's happening. And so we are investing, we're designing all of the capabilities into the platform so that we can grow with these tools as they get better and better versus just going after 1 particular strategy. So we feel good about it and Ken is doing a great job leading that effort for us.

Good. Just staying with margins, and I mentioned it just with -- you talked about time line being a little bit different, confident in the acceleration. To the extent that the macro does get worse, God forbid that happens. But how much flexibility do you have to protect margins and stay down this path of over delivering on profits if revenue gets a little bit tougher?

Well, we've historically I think tried to balance growth and profitability. And we've done a really good job with that. We've been thoughtful about our investments, measuring ROI. We obviously have strong free cash flow, a very strong balance sheet that gives us optionality. The exact formula of balancing growth and profitability, obviously, depends on the severity, the external environment and how that impacts SMBs. But we're committed to continue our bias for investing to extend our lead in the market and capture the opportunity we're going after, while at the same time, producing great margins and returns for the invested capital that we're deploying. So we'll continue to recalibrate that growth versus profitability balance as we learn more about the external environment. But we feel like as the business has scaled, we've also developed levers to create operating efficiency. You've seen that in gross margin. You've seen that in overall margins, including ex float. We've been investing, as Rene said, not just in AI for customer use cases, but for internal efficiency purposes, we've been creating expense optimization through offshoring and other efficiency initiatives. And as we scale, that gives us even more opportunity to expand those programs as needed.

Okay. And then similar macro question, but different approach just with the risk management side and your appetite to extend working capital loans and there's a lot of products that fit the whole embedded finance or embedded banking theme that's popular within fintech, spend and expense being part of that. Is there any signs of needing to pull back a little bit?

Well, starting with spend and expense. We've actually been fairly cautious on the macro environment. Ever since interest rates started increasing.

You're early to look at it.

So it isn't just now that we're starting to take a look at that. So we're very selective at where we lean in. We've got really good experience with credit underwriting, and we've improved results since we've owned the Divvy asset. We also have an advantage we're talking about a pretty short duration asset. This is a charge card, a 30-day charge card. We don't have a revolving component of that. We may in the future, at some point, probably not in this environment. And we feel good about how we're positioned. So we don't view the credit part of the offering as the growth algorithm. We view the software as the big value add and we'll manage that accordingly. We are making a lot of progress with that S&E business. Obviously, net adds are up. Volume is growing north of 20%. And one of the unique advantages we have is we're increasingly applying a cross-sell motion for this S&E product into the BILL customer base, where we have even more of an advantage in underwriting given the history in knowledge of those folks. So I think that also helps us in an uncertain environment with the credit exposure. As it relates to working capital, we're much earlier in the curve on that product. And so by definition, we're taking a more cautious approach in learning as we go. Losses will be a part of the growth in figuring out that business, but we're not in an environment. Right now, we're trying to buy growth by being more aggressive with our credit products. We're trying to produce the proper margins and returns, and we're very aware of the external environment.

Yes. And you can be selective there, right, because it's so early. So you could pick the best credits and grow with that. That makes sense. So that leads me to another question I have, just around Rene, you talked about resilience of SMBs. Your partners are also trying to engage with SMBs, banks trying to engage with SMBs. And I know Cashflow360 had chase, right, they're trying to promote SMB. So do you feel more energy out of the partner channel at this stage, whether it be the accountants or the ISVs, banks, you name it, any update there?

Yes. Definitely, there's more energy. Like we've talked about this having started the category, especially with accounts you think about the 9,000 firms that we are a part of their everyday practice and this is how they make money now. They support their SMBs with client advisory services, and that's something we didn't have before. So the energy and the accounting community continues to grow. And it's not just with the firms we have, which has more clients, but it's also to bring new firms in. So that awareness is something that's there because of the trust that we've enabled with our partners there and been doing this a long time. That same trust happens in the FI channel, which we're transferring into the non-FI channel, right? The example of 0 coming online as NGA. And what we're seeing is that when people see the -- just product offering that we have, the use case that businesses have with BILL, the sheer volume that happens, people kind of step back and be like, maybe my customers need that too. And so I would say all of that is increasing. None of this happens overnight. But I would say, compared to other points in our time line, I would say the interest in kind of embedding our capabilities inside of other capabilities is higher than we've seen before. One of the examples of this is just with our larger customers. Our larger customer are using our APIs to actually support themselves in ways that we haven't yet done. And so we've called that out with spend and expense, which leads to more spend on the product sooner, because they're able to get more employees on the product, whatever the use case is, and that's leveraging the APIs. So there's more demand for consumption of the APIs and the elements and the widgets that we've built, and we expect that to continue, especially as AI continues to make things simpler for folks.

Good. Glad to hear. We've got 2 minutes left. I want to hit a couple of things. People make sure people wanted me to ask around the capital allocation. That's usually end of the conversation question anyway. But I have to ask it, right? Stock has as been volatile. Your appetite to buy back stock here. I don't know if there's a bigger appetite maybe to do M&A given -- I know we talked about consolidation in general, but what do you see here? Has anything changed?

I mean there's -- we've done $400 million in stock buyback this fiscal year and there's $100 million remaining that's authorized. So it's possible we'll end up doing more. We're also very focused on adjacencies onto the platform that makes sense. So there are M&A opportunities, not necessarily today, but that we look at and we'll continue to evaluate. The reason we went public was to have a currency and to have the cash to be able to continue to expand the platform. So we want to make sure that, that priority doesn't get lost in the shuffle.

Good. We got 1 minute left. Maybe just to close it out, Rene, I think last year, I probably asked you about sort of what's the misconception with BILL stock. But I thought maybe this year, there's been a lot of volatility, a lot of uncertainty in the market. We talked about a lot of things AI included. But what are you excited about? I mean, what are you motivated to get up to work and get going? What can really drive a change maybe in the narrative, whether it be for BILL or for the broader B2B sector? What would you hone in on is maybe the top 1, 2 or 3 things.

We just have some opportunity in front of us. I think sometimes people kind of maybe get blinded by all that opportunity, but we're not. We're very focused. We have a laser-focused strategy around how we're going to execute. We have an amazing team. I think folks have -- I don't know if people have noticed, but if you look at the team members that we brought on, we changed organizational structure to have John as President to bring on 2 GMs that one leads the payments, one leading software. That's now in place. It took time to actually get the right people. But when I see how the team is interacting and how the team is working, it's an exceptional team. It's the best team I've been a part of. And I'm super excited to your point, get up every morning and work with this team to actually make a difference. I think when we think about AI and the implications that has not just for internal usage of it, but obviously, what it does for customers Ken's leadership there has been phenomenal, and we look forward to adding Mike and Mary Kay's leadership into how we execute that vision and that strategy. The market is growing. I think we see -- continue to see proliferation of our payment products be adopted. While there might be some friction here and there, like we keep adding more payment products, we keep doing more with our customers so they can get more done in their lives. And I just -- I think our ecosystem strategy being wherever the SMB is and being in a position to play wherever they are, whether it's accountants, whether it's direct, whether it's through partners, like we're uniquely positioned. We've demonstrated that we can do that, and that gets me excited because I see a lot of stuff unfurling, right? So great opportunity for the business and a great opportunity, obviously, for SMBs as we continue to own all these strategic skills.

All right. Great. Thank you both for the update. It was great to chat with you.

Thank you. Appreciate it.

Thank you.