QuickFee Limited (QFE) Earnings Call Transcript & Summary

Good morning, everyone. Thank you for joining us today for the QuickFee results webinar. The company reported its results for the 6 months to 31 December 2022. This morning, material was lodged on the ASX. Delighted to have management and Dale on the Board here today to talk through the results. Just a quick housekeeping, management will be taking questions at the end of the webinar. [Operator Instructions] But I'll now hand over to Dale Smorgon, Chair of QuickFee.

Thank you, Eric. Thank you, everyone, for joining. I appreciate you taking your time this morning. It's been a really productive and successful first half of the year at QuickFee, and it's a delight to be able to report and share an update with its shareholders this morning. First, I just want to thank our management team in both Australia and the U.S. They continue to put their heads down and do the hard work required to get us the results that we'll show you today, and their focus over the past 6 months has just been tremendous. I'd also like to take the opportunity to thank you, our shareholders, for your support throughout the period, and we certainly do appreciate that. So just to touch on some highlights as we go forward the presentation. You can see there clearly we're showing growth across all the key metrics of financing of PayNow, both ACH and card volumes in the U.S., as shown on the graphics on the right-hand side. The headline revenue growth number is 47% increase, which is tremendous, to AUD 6.9 million. And that's made up of both growth in the U.S. book, 30% increase in paying out transaction volumes and making up both card and ACH; and then, on the left-hand side, we just did a 23% increase period-on-period in U.S. financing business up to $10.1 million. We're delighted to see the Aussie business continue to grow and recover. Post-COVID volumes are increasing, and we're seeing additional client onboarding and firm take-up of our financing solution, and a 19% growth on financing throughout the first half is really pleasing. The Aussie business continues to be a mature and stable business that offers continued growth for us as well. But as we know, it's the U.S. business which is really the growth engine of QuickFee. And we'll spend a considerable amount of time in today's session talking through the strategy and how we accelerate that growth, and I'll be introducing Jennifer Warawa who we appointed as President of North America back in late November, early December. I'll be introducing Jennifer shortly to talk through how she's going about growing our U.S. operations. Just lastly on this slide, I guess, there's 2 more points to mention, one is the improvements in pricing and the high yields that we've managed to attract. We've been working really hard on improving margins across our card portfolio. We've been utilizing partnerships and technology to drive greater yields, and that's reflected in the numbers. And of course, and most critically, our bad debt levels are at all-time lows. I think we've got a unique proposition in a fully recourse lending product, in our QuickFee financing product. Those that are very familiar with the QuickFee story know that the firms we deal with effectively act as guarantor of the lending provided to their clients. And so that affords us extremely low bad debt levels, and Simon Yeandle will talk to that during his presentation. Lastly, in relation to team in general, we've touched on Jennifer, but we continue to build out a first-class team of executives that are experienced, focused on the professional service market, and we see that as absolutely a critical differentiator of our business model. I'm now going to pass across to Simon. We'll turn the page, and Simon will go through a bit more detail on the financial highlights. Simon?

Thank you, Dale. Good morning, everyone. I'll run through some of the financial highlights, and then we'll discuss in more detail the performance in each region. All financial figures in here are in Australian dollars. We do quote some total transaction volumes, or TTV, in U.S. dollars for the U.S. business, but all financial metrics are in Australian dollars. So firstly, revenue. We showed revenue in 2 main streams: interest revenues from our financing or lending products, and that's PayLater; and revenue from our payments products, also known as pay-in-full or PayNow. So financing revenue or interest revenue was up 38% to $3.3 million, and revenue from payments was up 57% to $3.6 million, bringing total revenue for the half, as Dale mentioned, to $6.9 million, up 47%. You can see from the chart on the right, the first one, our revenue has grown over the last 3 consecutive half years from $4.7 million to $6.2 million to $6.9 million. Next, and importantly, we've achieved substantial reductions in OpEx, which were down $2.3 million for the half year versus H1 FY '22 to $8.1 million. We scaled back technology investment and discontinued BNPL in the U.S. which contributed to that. Adjusted EBITDA was negative $3.6 million, an improvement of $3.5 million on H1 '22. And similar to revenue, EBITDA is trending towards breakeven, as shown on the far right. After depreciation and finance costs, net profit after-tax was negative $4.4 million, an improvement of 40% or $2.9 million over H1 '22. Our total loan book has grown 29% from 12 months ago to $36.2 million. And in line with our cost reductions, our average monthly cash burn for the half year just finished has decreased to $580,000 from $974,000 in the corresponding half 12 months ago. And that is expected to reduce progressively over the next 6 months. So at 31 December '22, we have $10 million in immediately available funds. That's comprised of $2.4 million cash in hand and $7.6 million available to draw or stay. Our low level of bad debt has continued at 0.16% of lending for the half year. We will continue to offer low credit risk products responsibly to low credit risk borrowers, and that's a key part of our business model. We'll talk a bit more about that later. The next slide, we'll talk a little bit about liquidity and our path to profitability. As followers of QuickFee would know, we have a singular goal for June 2023, and we can confirm that on current projections, we remain confident of achieving positive monthly cash EBITDA by 30 June 2023 within existing cash and borrowing facilities. So what gives us that confidence? Firstly, we know that historically, the June quarter is the strongest of the financial year in terms of TTV and revenue, and we expect this coming Q4 to be no different to that. Secondly, we recorded strong TTV and revenue growth in this half year period. Thirdly, we have a reduced and, importantly, stable cost base. And lastly, we've implemented revenue yield improvements in the past year in our financing and credit card products in the U.S., and this is already evidenced in the half year numbers we're presenting today. So we're confident in the cumulative impact of revenue growth from both increased TTV and pricing improvements. And without giving specific revenue guidance, as a data point in that bottom left chart, you can see that revenue for the month of December last year, so December '21, grew 43% to the month of June '22. So there's a track record of us growing revenue from December to June. So we are comfortable reiterating to you that we are on track. If we move forward and have a little bit of look at the operational updates for the U.S. on Slide 6. PayNow TTV grew 30% to USD 548 million, U.S. financing TTV grew 23%, both driven by growth in new firms and increased usage by existing firms' clients. Active customers were up 16% to 134,000, the strongest half year result in 3 years, and active firms in the U.S. were up 23% to 693. That 693 is a record for any half year period in QuickFee's existence. Over the course of the 2022 calendar year, so the calendar year just finished, we signed up 130 professional services firms. Importantly, as some of you may know, the volume of firm transacts can grow substantially year-on-year after a firm becomes a QuickFee customer. So it can grow anywhere from 3x to 5x in year 3 from the year 1 when it first signed up. So firm sign-ups are a good leading indicator of future volume growth. You'll shortly hear from Jennifer Warawa on our strategies to drive firm acquisition even further in the U.S. As I've mentioned, revenue yields increased primarily because our card surcharge in the U.S. increased from 3% to 3.5% from April '22, and we retained the full 50 basis points of that increase. And we also increased our financing interest charges from October '22 in the last half, and we're starting to see those revenue increases come through. We're especially focused on selling and promoting our highest-margin product, which is financing, in the current climate as interest rates and inflation drive demand for cash flow solutions for both firms and their clients. We are leading with that as a sales tool at the moment. But overall, the U.S. saw very pleasing set of results. So if we move back home to Australia on Slide 7. Financing TTV continues to show growing levels of demand, we're up 19% in H1 '23 to $20.6 million. We had the highest active customer numbers, 23,000, since pre-COVID, and active merchants were up 5% to 464. And 464 is again another all-time record for firms in any first half period, i.e., from July to December since QuickFee has been operating since 2009. So while Australia is a relatively mature market for us, one area we are seeing higher volume growth is in our legal disbursement funding business, which has been operating since 2014. This product provides funding for disbursement costs from law firms specializing in personal injury cases. And these loans can run for up to 2 years. We are seeing some quite substantial growth in that area of the business. So overall, our revenue is growing faster than volume. We increased our interest rate pricing in November '22, and we're starting to see those increases already flow into revenue. Our Jim's Pay Plan business, while it's still nascent, is showing encouraging growth. TTV grew 100% to $0.8 million over H1 FY '22. But overall, in the U.S., we are seeing the outlook for lending demand, it is promising. We do expect economic conditions to continue to be challenging. There's a lot of talk about fixed rate home loans converted to variable over the course of 2023, depending, we believe, as anywhere from $300 billion to $500 billion worth of fixed rate home loans, which could come off. So we do expect conditions to work in our favor and drive further borrowing demand in Australia. I'll now pass back to Dale to introduce Jennifer to talk about the U.S. market.

Thanks, Simon. I appreciate that. So accelerating growth in the U.S. market is the segue towards introduction of Jennifer Warawa who joins us from Dallas, Texas. So welcome Jennifer. It's wonderful to have Jennifer as part of our team. We recruited Jennifer in late November last year. Jennifer commenced in the first week of December effectively, so a couple of months into the role and already making a significant impact. Before I pass across to Jennifer, and without wanting to cover her entire CV, just we'd go to the next slide, thanks to Eric. You can read for yourself some of Jennifer's impressive background. I think the thing that stood out to us as a Board when we were recruiting Jennifer is her unique knowledge, understanding and experience of our core market. Jennifer ran her own practice for 13 years in Canada. I think that provides a very interesting and unique insight for anybody who then later joins a global giant such as Sage, focusing on addressing the requirements and the needs of the profession. And Jennifer held, over the course of 11 years, a range of global leadership roles, both in sales, in partner programs, in product management. And then for a couple of years, towards the end of her time of Sage, she was in a global EVP role with Partners, Accountants, and Alliances. So Jennifer comes to us extremely, extremely experienced and well versed in the needs of the profession in the U.S. and has already made a mark on our business in such a short time. And so with that, I'll hand across to you, Jennifer.

Great. Thank you very much, Dale. I appreciate it. And good morning and good afternoon to everyone, and thank you so much for joining us today. It's my pleasure to have the opportunity to share with you an update on the U.S. business, 11 weeks after joining QuickFee as the North American President. Given this is my first time presenting to you, I thought a bit of background may be helpful. I was born and raised in Kelowna, British Columbia, Canada and had an accounting and business consulting firm there for 12 years. As Dale mentioned, I was a Sage partner for much of that time and was actively involved in their ecosystem, speaking at conferences, sitting on product and business advisory councils and providing perspective to the analyst community about product progress and innovation. That ultimately led me to an opportunity to join Sage as an employee in 2008. And over the next 12 years, I handled a variety of commercial roles, first at the Canadian level, then North American and finally, globally. Although my roles varied with elements of channel, product, sales, marketing and innovation, there was a common thread throughout. I always had a focus on serving the accounting profession. So after over 20 years of being part of the accountant ecosystem, I'm thrilled to have the opportunity to serve accountants once again at QuickFee. On the next slide, before we get into the focus areas for the U.S. business for the second half of our fiscal year, I'd like to share with you 3 key observations from my first 11 weeks at QuickFee. First, I've been incredibly impressed with the level of passion, commitment and resilience displayed by our U.S. team. They've been through a number of significant changes over the last few years and then come through it all with a renewed sense of opportunity for what lies ahead. We may be a payments technology business but, at the heart of any business, are the people and the culture. And I've been incredibly impressed in both of these areas. In addition, we have many team members who have spent their careers in the payments space, and their knowledge and experience are important and incredibly valuable as we continue to innovate and deliver world-class solutions. My second observation is that, to some extent, we've attempted to focus on products and industries that were not part of our core business, and that's evident when you look at the progress in the core business itself. Thankfully, prior to my arrival, work had already begun to refocus the business and our U.S. team on our roots: serving professional service firms, with accountants and lawyers front and center. I'll share in a moment how we've doubled down on this focus area. Finally, I truly believe that we are just seeing the tip of the iceberg as it relates to the opportunity and potential QuickFee has in the U.S. market. I've attended many industry events and meetings in the last 3 months, and I've consistently heard that we have a very differentiated product offering that's in demand, particularly with QuickFee financing. But I've also realized that we have limited brand awareness in the industries that we serve. Our focused marketing and sales plans are already working to increase our exposure to and raise our brand awareness in our target verticals. If you want more proof that the opportunity in front of us is exponential, consider the size of the accounting market in the U.S., over 46,000 firms and legal at 10x that. Half or more of all payments to accounting firms still come from check. And in 2022, 93% of CFOs reported that they're actively digitizing their accounting operations. As you'll see on the chart, we've delivered consistent, impressive growth despite some of our shortcomings and limited market awareness. And with the right strategy, focus and relentless execution, I'm confident we'll be able to deliver results that are unparalleled to what we've delivered previously. Now let's move into the 3 focus areas for the U.S. business for the second half of fiscal year '23. The first focus area is around driving organic growth, and there are 3 key pillars in this category, which are sales and new customer acquisition, customer success and, of course, marketing. I'll touch on each of these at a high level. In the area of sales and new customer acquisition, much of the work is around structure, systems and processes. We're continuing to build a robust pipeline while upskilling the team in the areas that will have the greatest impact on their ability to win new business and, at the same time, removing distractions to improve sales productivity. A few specific examples of initiatives in the sales area include investing in additional sales engineering resources to support the sales team's technical product demos; increased promotion and sales of financing, which is our highest margin product; and implementation of some of the sales best practices that I've seen succeed at Sage selling into the exact same target market. In addition, I'm pleased to share that later this month, we'll have a new VP of Growth and Customer Success joining the business with over 17 years of relevant commercial experience at Sage, both in sales leadership and with professional services. The second key pillar of driving organic growth sits with the customer success team. Over the last few years, this team has triaged and project-managed a number of business changes, including price increases and sunsetting of our BNPL product. And I'm now focusing this team on improving the following: providing exceptional onboarding experience for our new customers, driving greater usage of all of our solutions across our customer base through effective cross-sell and upsell strategies and ensuring we deliver a high level of customer satisfaction and address any challenges that may come up. In addition, in January we launched our QuickFee Customer Council and had our initial meeting. The purpose of this council is to ensure that we have voice of the customer embedded in our day-to-day decision-making and activities. The final pillar of driving organic revenue growth in the second half is around marketing. And our key goals in this area are as follows. We aim to refresh our digital strategy to focus on increasing awareness and lead generation, again, in the accounting and legal professions, including the top-of-the-funnel media strategy. We intend to refresh our content calendar, including blogs, social, webcasts and thought leadership to target accounting and legal professions. And we are planning to increase our presence at a number of key events for the legal and accounting professions to ensure we're in the right places to engage with our existing customers, attract new customers and exhibit our commitment to professional services. On the next slide, the second focus area in H2 FY '23 is around building and executing strategic partnerships to enable exponential growth. It won't come as a surprise that the most effective and efficient way for us to scale the business is from partnerships that allow us to market, sell and build relationships on a one-for-many basis. I think about these partnerships in 4 categories: first, embedded technology partners, which is where we have our payment solutions embedded in our partners' technology, making us the preferred payment method; second, closer working relationships with our strategic partners such as Payroc who powers our credit card offering. Our strategic partners have both significant reach in the market with robust customer bases and go-to-market strategies. By partnering with them to plug into both areas, our reach and connection points with our potential market are incredibly amplified. Next, we intend to build more meaningful strategic relationships with industry partners, which include the AICPA, CPA state societies, the American Bar Association and various alliance organizations in both accounting and legal. Not only does this give us broader visibility and opportunity across our target verticals, but it also helps us stay on top of industry trends and learn ways that we can better serve our customers. Our long-standing partnership with the BDO Alliance is a great example of this. Finally, we plan to build out a more comprehensive referral partner network. We have many fans raving about QuickFee's solutions. So leveraging those fans is a natural step in enlisting them as referral partners. Now I know the most important part of every single one of our strategic partnerships is the activation and go-to-market plans. By specifically mapping out key activities, milestones and engagement opportunities and then closely monitoring to ensure that we're not only delivering on what we said we would but we're achieving the outcomes we planned, we will have much better results. The final focus area for us in the second half on the next slide is around product development acceleration. We must not allow ourselves to be distracted with things outside of our core business, and this is especially critical in the product area. Our #1 mission for product right now is to accelerate our Connect integrations with practice management solutions, both in accounting and legal. Our ability to provide a world-class solution with integrations to market-leading practice management solutions will allow us to accelerate new customer acquisition and ensure we maintain a high level of customer satisfaction and retention. In addition, we'll continue to build new functionality within our core products, make significant UI improvements and work to streamline the overall customer experience. And while we do all of this, we'll be looking for ways to be cost-effective and, in turn, maximum efficiency across technology and product. As I shared at the beginning of my update, the business has been through a significant amount of change over the last few years, and providing stability, consistency and focus is important to ensure we attract and retain the right people to take our business to the next level. I'm fortunate to be surrounded by a team of people who want to make great things happen for this business, for our customers and for each other. And I thank each of them for their continued support, dedication and commitment. With that, I'll hand it back over to Simon.

Thank you, Jennifer. We are very, very optimistic about the opportunities in the U.S. market, as you can tell. There are a couple of other points and call-outs I wanted to make on some of the financials. If we can skip to the next slide, so the details on the P&L there. A couple of call-outs, we know revenue is up 47% to $6.9 million, gross profit was up 32% to $4.5 million. The lower growth rate than revenue was really driven by the high interest costs on our borrowing facilities that are linked to the U.S. and Australian cash rates. As I mentioned earlier, we reduced OpEx by 23%, specifically in the areas of customer acquisition where costs are down 50%, mainly due to BNPL and some sales management cost reductions and product development expenses, which were down 36% as we completed a large part of our tech platform last year, and we managed to step down those investments after that. General and administrative and selling and marketing costs were flat. So adjusted EBITDA improved $3.5 million or 49% on H1 FY '22. For those new to the QuickFee story, we use a measure called adjusted EBITDA, which is the usual statutory definition of EBITDA but then deduct the interest expense on our loan book borrowings because interest expense is a core part of our operations. That interest expense is shown directly below interest revenue in the statutory P&L, second line on the right-hand side of this slide. At the bottom, higher depreciation and amortization costs include the amortization of the Northleaf facility costs. They started in early calendar year 2022. We've mentioned bad debts being at industry-leading negligible levels, 0.1% of lending. Again, for those unfamiliar with QuickFee, those are a core feature of our business model. Loans to clients of accounting and law firms are guaranteed by the firms themselves. So not only do we have 2 parties obliged to repay us, and that's 2 levels of credit protection, but generally, multi-partner law and accounting practices really go out of business due to their partnership structures and steady revenue streams. So it's an area that we've been operating for 14 years, and those low bad debt levels have been consistent across that period. Over on the next slide, I'll talk a little bit about cash flow and liquidity. It's quite a busy slide, but I just want to make 2 call-outs here really. The first, to reemphasize what I said earlier, we have $10 million of cash and immediately available facilities which, on current projections, is more than sufficient to fund the business while we reach run rate profitability. We don't draw any more cash than we need to, so we minimize the revenue expense. But that $10 million is available today. The second is on the cash flow statement. And at the top right-hand part of this slide, we'll see the first 2 lines add up to operating cash flow of negative $9.5 million for the half year. That's comprised of 2 main elements. First line, the net cash outflow from operating activities, and that represents the cash burn from running the business. That will become positive once we're profitable. The second line, net cash outflow from loan book/merchant funding, represents the cash outflow from funding our loan book growth. And that's funded from a mixture of debt facilities at approximately 90% LVR and our own funds at 10%. So as our loan book continues to grow, that second line will continue to be negative as we lend more money. So that's actually a good thing. But we add those 2 together to get our statutory net operating cash flows. That can be seen in a bit more detail on the next slide, the balance sheet, where loan receivables have increased as have borrowing costs. So loan receivables, current loan receivables, up $2.7 million; and borrowings, up $3.8 million in liabilities. Overall, net assets have moved from $16.3 million at June to $12.6 million at December. And that reflects the operating loss for the period. I'll now hand back to Dale to wrap up and take questions.

Thanks, Simon, and thanks again to Jennifer for giving us an update around the U.S. and the activities there. So strategic priorities and outlook, how we're looking in the business through the next 6 months and beyond. Clearly, we see there's continued tailwinds, and they'll continue to drive growth. The economic conditions are certainly helping, not hindering us, in regards to our core offering. We certainly have got a primary focus around selling into our core professional services market. And as Jennifer so eloquently outlined, you can see the contribution and the acceleration that we'll make with recruiting the right talent, the right experience, the right knowledge, people with the right relationships who have been there and done it before in order for us to successfully scale the U.S. As we know, the opportunity can be scaled. You also heard from Jennifer, and I think it's something that's really a primary focus of ours, is that we accelerate a very focused and laser-like product development strategy. We have a number of items on our pipeline for product development, many of those are around integrations with core practice management systems. Our investment in product development, we feel will stand us in very good stead as we roll those out to market in the coming months. Simon touched on the improved unit economics. From a summary perspective, again, I don't need to go into all the detail, but clearly, that has a significant effect on the margins that we're able to yield as we grow our volumes. And lastly, in relation to volumes, clearly, the market is showing us and our experience suggests that the seasonality that we're coming to through the next 2 quarters will continue to drive growth for us as we see both Q3 and Q4 accelerating volume that are available to us. So in short, hopefully, that's given everyone a good snapshot of our activities over the past 6 months. We're tremendously optimistic as a Board and as a management team of our ability to execute and to drive our core focus on getting to run rate profitability by June 30. As you can see, we've got a passionate, experienced and devoted leadership team and management team. And underneath that are a terrific group of people, both in Australia and the U.S., that are focused on success. So again, thank you for your attendance, thank you for your support of QuickFee. And I'll pass it across to Eric, who might have some questions in the chat box.

Thanks, Dale, and thanks, Simon, and Jennifer. [Operator Instructions] I might kick one for you, Jennifer. You obviously talked through some of the early observations and obviously, the strategic priorities going forward. But I think how do you see the opportunity in the U.S.? Relying on your previous experience selling into the accounting profession at Sage, with the QuickFee product, how do you see the ability to be able to scale up the sales in the U.S.?

Yes, good question. Thank you, Eric. I think that we're just at the beginning of even tapping into the potential opportunity in the U.S. market. I'd just reflect back on my attendance at the Digital CPA conference and just sitting at lunch and sharing what QuickFee does, and everyone at the table said, "Well, my firm needs that." And I didn't even know there were people doing that. And I handed out my card to everyone, and you follow up, and more and more of those conversations are happening. So you just realize there's so much potential out in the market. There's a lot of demand and especially, in a challenging economy, people are looking for ways to maximize their cash flow and make sure that they're holding cash and looking at payment options. So I think that we're just at the beginning of the tremendous opportunity in front of us, and it's now down to execution on the strategic plan that we've put together and getting it done.

Got it. Thanks, Jennifer. A question here, one I think for you, Simon, just on overheads, just around the previous commentary after the FY '22 results, talking about the overhead reductions that we made in the second half should be clearly seen in FY '23. If you could maybe just provide a bit of color on the 11.5% decrease this half and maybe some commentary on the CapEx, too, and perhaps your views going forward on expenses.

Yes. Thanks, Eric. Well, they have decreased, obviously, against the H1 last year. It was a more significant reduction of about 23% and about 11%, 12% from H2. Our cost base is relatively stable now. We've got the team in place as we accelerate some of the Connect product development and the next few practice management system rollout. We'll see that decline once that's happened. But for the rest of FY '23, we're probably going to stay at a similar level of overhead through the first half of the year.

Thanks, Simon. And maybe just an extension to that, you're obviously quite confident in talking about getting to run rate profitability by the end of the year. I mean, is there any other sort of color you can provide around that or any other confidence you can provide to the market? Obviously, you're not providing revenue guidance, but just the confidence in getting to that run rate profitability and then also maybe perhaps what it means for FY '24.

Well, our cost base is predictable, and it is stable. It's generally driven by salaries, head count, so we can control that. So we're reasonably confident we'll be able to predict that on current projections. We've seen revenue and volume growth in the first half of the year. There's no reason why we can't expect similar growth for the second half of the year and then into FY '24 at similar rates as well. And given the revenue yield improvements, it provides us with confidence that we can certainly hit that profitability target going into FY '24.

And just another one on cost that's come through, and specifically in reference to Jennifer's strategic plan, are there accelerated costs associated with those strategic parties and, obviously, any commentary around the revenue being able to, obviously, more than outweigh any additional costs that might be associated with that?

Now I think, as you said, the cost base is relatively stable. If anything, we may accelerate some of the Connect development. So there may be a slight acceleration and then a decrease as well. But overall, over a 6- to 12-month period, it will stay reasonably consistent.

Thanks, Simon. The other question here maybe for Jennifer or Dale, just around U.S. and competition, I guess how QuickFee stacks up and then more broadly, the specific point here of any IP protection for QuickFee in the U.S. market.

Well, maybe I'll start with the competitive environment in the U.S., and then Dale can comment on the IP protection part, or Simon can. I think we do have some competition in the U.S., and we're very aware of our competitors and the differentiators. I think there are 3 things that make us much different than others that are in the market. Our first big differentiator is around QuickFee financing. And we don't see anyone else offering it in the way that we do to the firms and to the customers, and we get a lot of advantage from that. The second part is around our integration strategy. We have a pretty aggressive integration plan with practice management solutions, and that integration and automation of data provides a great advantage as well. And then finally, I'll just share what a customer told me when I did a customer visit a couple of weeks ago and I loved, was they've been using our competitors in the market, and they switched from one of our competitors to us. And when I asked what were the determining factors, they referenced the first 2, but they said the other one was they felt like they were just a number with the competitor. They never had anyone that came to visit, they never had a call and they just didn't have a relationship. And with us, they feel like they have a relationship with someone who's really focused on the same things as their firm, and we understand their firm. So I think competition is healthy. I think the market opportunity is large. There's room for more than 1 player. But at the same time, we need to stay on our toes and stay ahead of it, and we're doing that.

Thanks, Jennifer. I mean I've got nothing further to add. I think that provides really the key differentiator that we have in the marketplace. There's no IP protection in place based upon our existing technology stack per se. I think ultimately, we're deriving competitive advantage out of being early in the market, about building close relationships with our customers, about understanding our customers, about continuing to drive product innovation. That's where we're gaining our competitive advantage, not via any form of IP protection over technology.

Thanks, Dale. Thanks, Jennifer. Just a higher-level question now sort of about the broader economic conditions. We've seen some buy now, pay later companies fail or struggle. QuickFee is obviously not in that bucket. But in terms of the increasing interest rate environment, potentially a recessionary environment, how does QuickFee fare in this environment?

Yes. Okay, I can take that, Eric. So we do get that question quite often. And as we've said in the past, our margins on interest rate products are reasonably high. We have the flexibility to change our interest pricing pretty much instantaneously in our systems. And what's important is that the clients and firms are paying their interest over the term of the plan. So it doesn't impact the firms. So the financing product is free to all our firms. So they, to a large degree, do not care what the interest rate we charge to their clients is. Clients generally accept it. There's very little elasticity on price. We've dropped interest rates during COVID. We didn't see an increase in demand necessarily. We've increased rates recently, and that hasn't impacted demand negatively either. So it's pretty inelastic, and the margins are good. And why clients take payment plans out is the convenience, like if you go to a portal, click PayNow or take out a plan. So it's an instantaneous, very, very frictionless process. Interest is closed, but it's not an obstacle by any stretch in imagination, so we can increase interest rates, and we have as often as we need to maintain margins.

Thanks, Simon. Another question has come through, perhaps one for you, Simon also, it's just about QuickFee's engagement with the investment community. What are the expectations going forward? Will those be increased? And then specifically, just around what's the company doing to shed -- or any sort of association we provide our PayLater business, particularly in the Australian investment market here.

Yes, that's a great question. Yes, we are certainly intending to ramp up our activity. We've been very, very aware that, at the end of the day, we've got to put numbers on the board, and we got to sort of hit that profitability mark. And then we will see new investors coming [ off the registry ], we hope to. The market has been pretty challenging, particularly small, loss-making tech companies over the past 2 years in Australia hasn't seen a great deal of love. There hasn't been a great deal of interest in breaking houses and willing to cover them. But that's why we're focusing on getting to profitability, and then we'll start to see more interest. On the BNPL side, we've discontinued the product, and we're going to continue on our core, which is payments and lending to our accountants and lawyers and helping them get paid faster.

Yes, I think just on that Simon as well, I think we've been really transparent as a Board and as a business in communicating the refocusing of our strategy last year when we took the view to discontinue the BNPL line. I think unfortunately, there is some overhang or some shadow that's been cast from all companies that operate in a lending style business. Obviously, from our perspective, we've tried to make it really clear that our fully recourse product and our payments revenue streams are in no way associated with a buy now, pay later style company. We'll continue to reaffirm that to ensure that the investment community understand that as fully as possible. And the results, I think you can see, are reflecting that.

Thanks, Dale. Thanks, Simon. It looks like we've exhausted the questions. So unless there's any final questions that come through, I'll look to wrap things up. So thank you to investors that made the time to join today. Thank you, Dale, Simon and Jennifer for presenting a great set of results. So Dale, I might just hand back to you to close things out.

Yes, thanks, Eric. And again, just wanted to express thanks to shareholders for their support over the duration. As you can tell, we've got our heads down. We're focused as an executive team and as a Board on delivering results. I think there's a clear path towards profitability. We've got clear tailwinds in our favor. And so we look forward to updating you in the next quarter and share our terrific progress. Thank you.

Thanks all.