Payoneer Global Inc. (PAYO) Earnings Call Transcript & Summary

All right. We'll get started. Next up, we have Payoneer. We're excited to have John Kaplan, CEO; and Bea Ordonez, CFO of Payoneer. Guys, thanks for joining us. Really looking forward to the conversation.

It's great to be here. Thanks for having us.

So Payoneer has been on a journey over the last 10 years or so. Can we maybe open with a history of the company? How did it get started? What was the message on the company when the company went public? And then how has the story evolved over the last 2 years with the management transition?

Sure. I'll take that and give some context and Bea, if there's something you want to add, please do. Payoneer's, first of all, an extraordinary company and was founded nearly 2 decades ago with an intense focus on customers and those customers are in the emerging market small business owners. And initially, the firm was designed to help underserved businesses, participate in the global economy. Really, that has been the mission and vision of the company since its -- our founding. And we've evolved from a prepaid cards business at our founding to a marketplace payouts business, which is, I think, sort of what we're famous for when we went public and people well understand that we have leading and significant market share in the global marketplace payout space. And now the fastest-growing parts of our business are in the cross-border B2B payments space, where small business owners in Vietnam or in South Korea or in Argentina, want to invoice their customers around the globe and want to make payments to their suppliers around the globe. So we are protecting and growing our marketplace payout space. We are driving exceptional growth in our B2B market significantly in Latin America, APAC, CEMEA, in these really fast-growing economies, in India, Argentina and others. And we've built a strategy today, which is focused on high-value customers. We refer to them as ICP customers, or ideal customers. They generate or receive over $6,000 of trailing 12-month volume into their account or payments into their accounts. We're driving our ARPU, our revenue per customer with cross-selling the products and our product family, our virtual commercial MasterCard, our working capital products, a number of other franchises that are in the sort of exceptional growth stage of their life. And we are operating the company around driving long-term sustained profitability, driving down our cost to serve customers, building innovation into our platform itself. As a business with employees in 28 countries around the globe, we are on the ground serving the fastest-growing economies with a unique solution because the local banks, their local banks don't provide the solutions they need. The cross-border mega banks don't and the local fintechs don't. So there's an underserved population of 80 million or so SMBs that need Payoneer and then there's billions of freelancers, who have the potential to need Payoneer and we are at the beginning of a journey of capturing significant market share in that way.

Got it. So I think historically, the company has talked about 20% growth in the business. And I think, historically, we thought about e-commerce volumes growing in the low double digits and kind of new business driving incremental volume beyond that. I think you've recently started focusing, as you just mentioned, on the ideal customer profile or ICP metric. I think growth was 6% in 2Q and the most profitable subsegment was growing in the high teens. How do you frame the growth algorithm now with this kind of customer focused structure?

Yes. It's always been our belief that the best companies in the world have very simple frameworks for growth and a framework that everybody in the organization can understand and shareholders can understand. So our framework as it's coming together is ICPs, ideal customers, ARPU, the revenue we generate per customer and our cost to serve those customers. As you mentioned, we had 18% growth in our top, our sort of highest value customers. Those are folks who receive over $120,000 of volume into their Payoneer account on an annual basis. That growth is really great for us. We have 12%, 13% growth in key markets of APAC, LatAm and CEMEA and 6% growth overall. I think the reason why this is significant is the Payoneer economy looks like customers use Payoneer to invoice folks and get paid by them and use Payoneer to make payments to their contractors or suppliers. So we have power users in the Payoneer network connections that are invoicing 250 folks, receiving payments, making payments to subcontractors in the Philippines or Latin America in the hundreds of dollar increments. And that economy exists entirely on the Payoneer platform. In terms of ARPU, we're in the earliest stages of this, right? Bea and I joined the company in the last 18 months. I've been CEO since March 1 and Bea CFO since March 1. We have successfully focused our organization on high-quality ICP growth. We are beginning to drive intense focus around ARPU growth and leveraging generative AI and other technologies to reduce our cost to serve, which will be a multiyear journey, but 1 that we think will drive new opportunities for us in serving those customers.

That makes sense. And I want to get some of those ARPU opportunities here in a second. But maybe we can just hit on some of the near-term growth expectations. I think on the earnings call, you noted that core revenues had accelerated throughout the quarter and exited at roughly a double-digit rate. What have you seen so far in 3Q? And is there anything to call out for the remainder of the year?

Yes, I'm happy to take that. Yes, look, from a quarter-to-date basis, volumes have rebounded quite nicely, especially in e-comm. So we're seeing high single-digit growth in that e-com vertical year-over-year. We've continued to see strong performance in our travel sector, and we're seeing really strong growth from our larger account holders. To John's point, we focused on that ICP metric. And we've particularly focused on those customers that do more than $10,000 in a given month, and we're seeing strong volume growth from those customers. For Q3, we expect revenue growth to be roughly in line with Q2 with an acceleration, as we called out during our earnings call as we head into Q4 from a number of factors, right? We'll be lapping the terminations in our B2B business that we've talked about, which occurred in Q3 of 2022. We see improving trends, as I've noted, from an e-comm perspective and expect a seasonally improved performance in that sector. We're seeing stronger growth in B2B more generally, even without sort of considering those B2B terminations in some of the regions that John talked about, LatAm, CEMEA, APAC. And we're going to see the full quarter impact of some of those monetization efforts that we talked about through the last several earnings calls related to pricing and other initiatives, we'll see the full quarter impact in Q4. So we're very confident in hitting our full year guidance. We're reiterating that guidance today, which is that revenue we expect to be between $820 million and $830 million and adjusted EBITDA between $160 million and $170 million. That would represent for us at the midpoint, a 20% adjusted EBITDA margin.

Great. It sounds like things, particularly on the volume side and e-commerce side, are performing in line better than what you had expected. Maybe just going along with the pricing actions that you mentioned and sticking with the theme of improving unit economics. You've also made a number of pricing actions for small and inactive accounts. Could you talk about the ones that have been implemented in the second quarter? And then is there more to do on that pricing front into the next 6 to 18 months?

Yes, sure. Look, we've taken a much more segmented approach to how we think about pricing, a much more nuanced approach. And just as we focused on ICPs in general and then that subsegment of larger ICPs, we're taking a rather different and more nuanced approach to how we price those cohorts. So from a non-ICP perspective, as you've noted, we introduced a number of fees, some of them in Q2. There are more fees that are active and will impact Q3 and Q4. One of them is an annual account fee that we waive when volume thresholds are above a certain dollar amount. We are testing. Actually, we went live this week. Registration fees, top of funnel. We had called that out in our Q2 earnings call. We're live now and we're testing, and that's really designed to intentionally introduce some friction into that top of funnel and really help us kind of self-select, if you like, the kind of customers that are going to generate volume and bring with them good unit economics, so that we're excited about that. And just overall, we're taking a much more nuanced, as I've said, approach to pricing, both at the corridor level and in terms of geographies. We operate in roughly 7,000 corridors in terms of our ability to move money through the network. And we're going to be much more nuanced in how we look at the pricing there both from a fees perspective and also from an FX perspective. For larger customers, and this is looking out more into kind of the back half of the year and into 2024. We've had a lot of success, especially in China, but we're expanding that model with bundled pricing that really looks at sort of driving a range of product adoption. To John's point about optimizing ARPU, we have found that when we bundle products and offer that kind of pricing to customers, you can incent customer behavior, grab more share of wallet, incent more adoption of some of those higher value and higher take rate products that we have in our offerings. And then I think the final point that I would add that goes to, I think, John's connectivity and the connections that we see in our network, is that we move literally billions of dollars of value intra network. So between Payoneer accounts or between individuals and entities, who each have an account on our network. And we're experimenting actively. That's also gone live in the last couple of weeks. We're sort of pricing mechanisms to see what it does to understand better some of those use cases, to see what it does to customer behavior. So that represents, I think, in the long term, a real opportunity to monetize that flow as well.

Makes a lot of sense. Maybe we can talk through a couple of pieces of the business. Marketplace payouts, as you mentioned earlier, probably the business that Payoneer is most commonly associated with. How do you think about the trends in that market? How large is it today for Payoneer? And then what are the competitive dynamics like?

Sure. And we love the marketplace payouts business, right? It brought us to the dance. We have built a great brand. If we have an event in Vietnam or China or the Philippines, you name it, thousands of prospective customers will show up. And the reason they'll come is because if you want to sell your capability, either your goods or your service on 1 of the largest global marketplaces, eBay, Walmart, Amazon, you name it. We are a significant portion of the marketplace payouts space. About a $300 billion market where we have leading market share, I'd say 20% approximately market share of those payouts. And it's a competitive market, right? And these are valuable, incredible marketplaces, and others are trying and continue to try to grab share. I will say we hold our share and as Bea talked about some of the bundling, I think we're fighting competitively very effectively to both grow and retain what we have. And we are expanding the number of marketplace relationships that we have. And you'll hear from us in, I think, coming quarters of significant relationships with some of the newest, most progressive ways goods and services are being marketed globally, and we are right in the mix of those. As we mentioned, we're seeing rebounds in e-com. We're seeing good volumes in e-com. Our teams, we shared that we brought in a new leader in China. She's doing a great job with the goods exporters in that part of the world, making sure they have the tools and services they need on the Payoneer platform. The growth long term, I think, is going to be strong. I'm excited about LatAm, CEMEA and APAC and the -- sort of those markets and the growth of marketplaces there and the need for those marketplaces to have global supply, and we're helping solve that problem, both helping those marketplaces add supply and providing unique financial services capability to the folks who sell there.

Got it. Makes sense. It sounds like an interesting pipeline, too. Maybe we can pivot to B2B. This is probably a little bit less well understood. Could you give us an overview what is the B2B platform on Payoneer? Who are the users of the platform? And where is the stack up in terms of investment priorities?

Sure. So priority #1 would be clear, but let's talk about it from the customer's perspective. If you're a business owner in Argentina or in Colombia or in the Philippines or Morocco or you name it, UAE, India, and you have customers around the globe, getting paid by your customers is hard to do. And we've simplified that, a number of products enable invoice and getting paid very simply, and that works. It also at the same time, if you're a business in the United States or in Europe, and you have contractors or suppliers or even employees around the globe and you want to make payments to them, we've simplified that flow. This is a huge market. $6 trillion addressable opportunity. So our marketplace playouts business where we have 20% share is a $300 billion opportunity. The B2B in AR and AP business, $6 trillion, and we are well out in front, we think, globally providing this value to those SMBs that are doing cross-border customer development and cross-border accounts payable. We are heavily weighted in LatAm, APAC and CEMEA, particularly in the services sector. And I think this is really important for folks to grasp is people think of us, Payoneer, frequently as marketplace payouts for goods sellers in China. We are that. We are also providing the support for the services sector globally as it relates to invoicing and getting paid by those customers. We've been opening new verticals. One example is agricultural exports from Europe and making it possible for those folks, who are selling grain around the globe, to both invoice and get paid by their customers. We have a very robust TSM team. We are a high-tech and high-touch business. And I think this is important because on the ground in Pakistan or on the ground in Ukraine or on the ground in Colombia, Payoneer executives are there to support the needs of the global entrepreneur, and that's a value I think we really provide. At Investor Day on September 21, Assaf Ronen will get up and present some more context on the product and features we're building to enable and sort of support that global trade. But I think priority #1 for us is our B2B franchise, our exceptional AP and AR tools and services. And I imagine we can talk a little bit about the growth of our commercial MasterCard and what we're seeing there because that spend management becomes increasingly important for our customers. They're asking us to solve that problem for them.

Makes a lot of sense. Bea, maybe we can follow up on some of the numbers here. I think the number has been a little -- the growth in that business has been a little depressed from some of the actions you took last year to exit some customer relationships. You just talked about lapping that in the very near term. Talk about what the growth profile has looked like in that business under the surface and maybe what your expectations are in the near term?

Yes. No, absolutely. Look, we have found it helpful to disaggregate that business a little bit into China. As John says, we're known for serving China exporters, goods sellers, third-party sellers, but into China and that rest of world business from a B2B perspective and not completely sort of the case, but to all intents and purposes, China is a goods seller business for us. And the rest of the world, broadly speaking, is service-oriented business for which our existing products and our existing infrastructure really is a good fit. As John noted, those kind of service-oriented business have both cross-border AR needs and also often cross-border AP needs. So they're paying contractors and employees across the globe. They're invoicing for services, whether it's marketing, whether it's technology-type services across a broad range. So today, and certainly for Q2, what we saw is our China business from a B2B perspective on a volume basis was roughly 20% of the total, and the rest of world business comprised the remaining 80%, with strong sort of performance in that LatAm, CEMEA and APAC region that we talk about a lot. That represents roughly 40% of the volume. And we saw really strong growth performance in there. CEMEA grew 45% from a volume perspective. APAC grew 27%. LATAM grew 18%. So again, service-oriented business. And it's also worth highlighting when we look at that China sort of aspect of the business versus the rest of world, the very different yield dynamics of that different book of business. From a China perspective, those goods sellers roughly 50 basis points is the yield that we would expect on B2B flow from that region. As we look at the rest of world, that yield dynamic changes a lot, and we're in the 2% to 3% range. So again, we're very focused on continuing to grow that service-oriented book of business, very focused on those 3 regions that we've talked about, very attractive unit economics there and seeing very strong growth in general. So as we lap those terminations from 2022 and reaccelerate our growth in those other regions, we're confident that this will be a significant driver of revenue back -- in the back half of the year and also through 2024 and beyond.

Got it. And maybe to dive into some of the monetization levers within that business. And it's my impression, correct me if I'm wrong, is that a big part of the B2B business historically has been more on the AR side. But you mentioned some of the AP opportunities and the virtual card penetration has been increasing pretty significantly. And I think virtual card penetration in AP is a concept many investors are familiar with in the B2B space. What do those trends look like for you? And how do you sort of frame the opportunity for higher utilization of that product?

Yes. So I'll start and then Bea maybe you'll join me. Helping people get paid is sort of job #1 for an entrepreneur because you can't feed your family if you can't generate the revenue of your capability. We're solving that effectively. But then to run your business and keep track of your expenses, you really need to have sophisticated accounts payable solutions. And our commercial Mastercard is a small but really fast-growing business. $1 billion or so in trailing 12-month volume, 40% year-over-year growth and over 2% yield. And our customers really want this product, right? They're excited about the product because it gives them the ability to -- if you're buying ads on Facebook, if you're paying DHL, if you're thinking about sort of keeping track of your expenses and your employees are making purchases and you want to be able to manage who's spending what with whom, Payoneer is really solving that problem for people. The cross-selling effort is a new 1 for us, right? And that's something that over the last 6 months, we've really begun to put some emphasis on. And we're seeing it both in our customer support organization doing it in their individual relationships with customers, and we see it in our product and platform organization in our bundles as Bea was referring to. And that approach, every customer is not going to be a commercial Mastercard customer, but many need that solution. And as the capabilities expand, we feel pretty excited about what that can do for us.

Makes sense. Another monetization lever is Payoneer Checkout. Another high take rate product, helps a lot of your customers do business cross-border. What are the problems that you're solving for customers who leverage this product?

Yes. So this is a great example of homegrown innovation being built inside of the Payoneer organization based on specific needs of customers. If you're a goods seller and you're trying to sell your products globally, first thing you do is you get on Amazon or Walmart or what have you, and they drive the demand and you have the supply. Step 2, if you're a goods seller is build your own website and sell those products to the world because you pick up all the margin. Well, the problem is if you're in China or Philippines or in Taiwan, and you want to do the same, the acceptance rates on checkout, if you're selling to folks here in the United States are atrociously bad. So if you get 45% acceptance rates of credit cards, you can't effectively buy advertising to drive return on your ad spend to get growth, right? And it's my experience working at Alibaba, like there's nothing more important for a good seller than acceptance rates and conversion rates and return on ad spend. At Payoneer, what we've done is we've built Payoneer Checkout. What Payoneer Checkout enables our goods selling customers to do is to act local here in the United States. So if you're in the Philippines and you're exporting sweaters, T-shirts, sneakers, what have you, getting 99.5% acceptance rates makes buying ads on Facebook and Google effective. That product has really been exceptional for us. And I'm excited at September 21, we'll share some more specific details on it, but I'll -- just some highlights that I'll share. Average monthly customer volume is significantly higher than our average in the organization. Most of those customers are ICP customers at the highest value ICP, right? Because if you're a goods seller in your e-commerce store, you're certainly doing more than $10,000 a month in volume. And that volume is -- comes into the Payoneer platform, comes into your Payoneer account in addition to your Amazon, Walmart, Mercado Libre, Coupang volume coming into your Payoneer account. You then leverage our accounts payable tools as we've been talking about. Since we've launched that, over $100 million of volume in that we're at significantly higher take rates. This is a 4% take rate business. And I think there's room on that. There are higher transaction costs, right, because this is a much lower-margin business. And so as that business grows, today, it's small relative to our whole, but you can see the potential for that. This is a hundreds of billions of dollars market opportunity in terms of the volume. We are a brand well positioned to capture it with relationships with the customers who trust us for this very thing. I would say I'm excited about our partnerships and relationships with WooCommerce, Shop [indiscernible], Shopify and others. So this is a franchise that is homegrown, invented, fast growing and a core part of what we think '24 can be.

I mean I wanted to ask a follow-up just because I think it's important, a lot of investors when they hear merchants going DTC, they think about some of the partners, as you mentioned, in Shopify in particular. So can you maybe double-click a little bit on where Payoneer Checkout fits into those kinds of DTC ecosystems?

Yes. I think the Shopify example, an amazing company, right, an extraordinary success. And their understanding of payments is exceptional. Our franchise is really powerful in markets where they don't have the amount of emphasis that aren't on the ground. And so on the ground, where we're on the ground and a powerful brand. And this is something I think you and I've talked about in the past, it would be exceptional if every shareholder of Payoneer took a trip with me and went and saw what the Payoneer brand looks like in Bangalore or what it looks like in Mumbai, or what it looks like when Payoneer has an event on the ground in Lahore, 5,000 people show up, because we're the passport to the global economy for them. So Shopify is well known for all of us here and obviously done a brilliant job, and I have nothing about my respect. What we are them to those entrepreneurs in the markets I referred to.

Got it. Super helpful. Maybe pivoting over to take rate. I mean taking all of these initiatives that we've talked about, B2B, Virtual Card, the pricing initiatives, checkout, we haven't even talked about capital advance yet. Could you talk a little bit about how you're thinking about take rates in the near term, maybe in the back half of the year, but also over the next several years as some of these initiatives continue to progress?

Yes, happy to look at as you've kind of noted, take rate for us matters and is based flexes, if you like, very much based on the geography of the customers that we're serving and also the products that we're serving to them. So long term, we expect take rates to continue to increase. We've been quite successful in doing that historically. You touched on some of those, right? If we can broaden the range of products as we've done, so that's our commercial card, our B2B offering. They have very different yield or take rate dynamics, if you like. So as we broaden the range of services, B2B is a great example, both of broadening the range of services into a higher-yield product but also being able to monetize monies into the platform as well as monies out of the platform, where historically, as a marketplace payout business, we were monetizing usage on the way out of the platform. So it's broadening those services. It's driving cross-sell and upsell. Again, pricing can be a powerful lever there. Our boots on the ground and as we shift into sort of more effective go-to-market motions vis-a-vis our larger customers, it's proving very effective in driving commercial card adoption, as an example. Our checkout business, as John has noted, again, a very powerful tool for us to bring more AR into the platform, a higher take rate overall. We have a lot of runway there. We've grown that business quite quickly, as John said, from 0 to $100 million since launch, but there's a tremendous opportunity here. And we have the distribution, right? We have the relationships. We have those unique assets on the ground to drive adoption of these kind of products. Pricing is certainly an aspect there where I think as we look at more, as I've noted, segmented approach to pricing. We can use that as a lever to both better monetize and drive up the take rate in certain cohorts of our business as well as to incent behavior. I think that's a really important point to leave here. Those larger customers, again, as we bundle and take a different view on pricing, we can drive more adoption of our products at higher take rates. We can grab more of that incoming AR by really broadening the suite. So look, overall, we expect take rates to continue to move forward and accelerate.

Got it. Maybe we can switch from kind of top line to bottom line sort of initiatives. And I want to start on the onboarding and compliance side because I think that's 1 area where you guys have been particularly focused on improving the efficiency of the organization. What are the challenges that you face in onboarding and compliance today? And maybe talk through some of the investments that you're making to streamline that and it wouldn't be a tech conference if I didn't ask if there's some sort of AI angle to that.

There is some kind of AI angle to that. I'll lead with that. Look, we've built tremendous -- going back to where we started, we've built tremendous infrastructure that allows us to serve country -- companies, SMBs, that sit in 190 company -- countries and territories. That means we have to be able to onboard and successfully perform KYC and other compliance measures across a very broad geographic footprint. That's incredibly complex. It also acts as a competitive moat, right? We've built a very complex infrastructure to support that and to be able to serve those customers and interact with all of the banking partners that we have to seamlessly move money across, as I've said, 7,000 different corridors. So the onboarding of that many, we have 500,000 registrations top of funnel per month. We onboard, as I've said, across many, many, many countries and territories. It's a tremendous challenge, right, and 1 that we invest in heavily. And it also represents a tremendous opportunity for us to really use technology to drive further efficiency, right? So we've talked a lot about improving our onboarding capabilities, moving to a faster, more hands-free self-serve model. We've talked a little bit in the past about using predictive modeling, so generative AI, top of funnel to really kind of provide a more white glove service, if you like, to customers who will meet our ICP kind of definition, who are those ideal customers that we want to serve, and we're testing that, and it's proving very successful. So we think, as I say, look, technology to drive more self-serve capability, AI to do a better job selecting and kind of driving the traffic through our funnel, we're going to continue making significant investments on that, and we think that can unlock just a ton of benefits both in activating customers more quickly, bringing them to profitability more quickly and driving more efficiency through the model as well.

Makes a lot of sense. And you're 1 of the few companies that actually had more resources to work with and not less over the past 18 months. There's been a significant tailwind in the business from float revenues. Maybe you've talked about a significant amount of resources that your customers keep on the Payoneer platform. Some of the investment spending and strategic actions have weighed on operating leverage until recently. But you've talked about ending the year with less headcount that you entered in the year. You're taking pricing actions across the business. Given all of this, how should investors be thinking about the core operating leverage in the business and maybe leaving float revenues to the side?

Yes, sure. Look, you mentioned the amount of cash that our account holders, that our customers, keep on our platform, $5.5 billion at the end of Q2 and really demonstrates both the trust that our customers place in us and also the utility that we provide them. Again, we've built a platform, those unique assets, right, a platform that allow our customers to manage multiple currencies in a single UI and a single experience, and to receive and pay in multiple currencies again within that single platform. As a result, as that utility has gone up as we've provided more AP methods, more ways for them to use those funds, we've seen that we've been able to grow the funds on our platform at 2x the rate of volume coming into the platform. And that has generated in this high rate environment, a significant amount of core revenue for us, so roughly $210 million we expect for 2023 and we've earmarked a portion of that. Again, as you've noted, it gave us flexibility in this year. We earmarked roughly 25% of that float income to make investments in our platform, to make investments in some of that technology that we just talked about around onboarding, around self-serve capabilities more broadly. We earmarked 25% of that to buy back shares, so to return capital to investors. And the rest we've allowed to sort of drop to the bottom line from an adjusted EBITDA perspective. Look, we think, as I've said, that those platform investments are key to unlocking future operating leverage. We've made other kind of adjustments to our expense base as we've moved forward. So we announced layoffs back in July of almost 9% of the workforce. All of these things position us to drive improving adjusted EBITDA performance as we look to a normalizing rate environment, which I think everyone would agree is not going to be 0 anytime soon, but is likely in that 2% to 3% range.

And I think there's a debate among investors about how to treat float-driven revenues. It's really common to see float revenues with payments companies and normally that comes from settling transactions. Yours is a bit different in that you kind of have this multicurrency wallet or operational account for your customers. Could you talk about the reasons that Payoneer customers keep cash on the platform? And I think you mentioned talking about some ways to maybe lock in some of the benefits of float and treat this more like core revenues. Maybe you can expand on that.

Yes, absolutely. Look, we firmly believe that customers keep balances on our platform because we provide them a utility locally that is valuable, right? So they are able to manage multiple currency and multiple AR and AP needs from a single platform. And that's incredibly valuable, right? We've talked a bit today that our customers have both cross-border AR and cross-border AP needs. It's a hedge against inflation in local markets. Look, we have a very vast global footprint, and that's incredibly important to some of our customers as well. It acts also as a hedge, frankly, against currency fluctuations and devaluation, as a hedge against local bank sector instability, right? Again, we have a very vast footprint. What we've seen though in terms of that utility and what we found useful to really sort of drive home in how we think about that core revenue is that as we've added more products and capabilities, customers are keeping more of their money on our platform for longer. So roughly, as an example, 1/3 of our customers today keep more than 3 months' worth of usage on that platform. And I think that's a very powerful data point to really illustrate what you're saying, Will. The funds do not come through our platform in a sort of transitory way sort of entering and immediately exiting. They sit on our platform for a long duration. We've measured time on platform and that behavior has changed over time, again, as we've added utility. So we're confident that we will be able to continue to grow this source of revenue. We actively manage our float income. We manage how we leverage our bank relationships and so on, and we're looking to manage for that duration risk as well as we move forward.

Makes sense. In the 10 seconds that we have left, John, maybe you could talk through capital allocation. You recently did a deal in the capital advance space. What's the appetite for further M&A?

Yes. We have a real opportunity to add products and services that we can leverage our distribution system to sell to our customers, which can drive both ARPU, retention and engagement on the platform. And we're active in the space, looking at things to add to the platform.

Awesome. Okay. I think we're out of time. But thank you so much for joining us, really enjoyed the conversation.

Thanks, Will. Thank you.

Thank you.