QuickFee Limited (QFE) Earnings Call Transcript & Summary

Good afternoon, everyone. Thank you all for joining today, for the QuickFee Limited retail briefing here in Sydney. There are a number of people that have joined online. Delighted to have Board and management here today with us. We've got Dale Smorgon online from Melbourne, you can see there in the camera. And in the boardroom we've got also newly appointed U.S. President, Jennifer Warawa, and then also CFO, Simon Yeandle. So we will be taking some questions from those online. [Operator Instructions] So I'll now hand over to Simon and Jennifer, or perhaps Dale.

Thanks, Eric. It's great to have so many people joining. Eric, when it starts, If you could share the presentation and that will be useful. And if we can bring that up to start this morning's or this afternoon session behind me. We'll try to touch on some of the key highlights of the business' progress and really focusing the majority of our time talking about the U.S. and opportunity, as we see it, in the U.S. Of course, it'll be a great pleasure to introduce Jennifer Warawa, who has taken on the role of President of the U.S. business. And of course, Simon Yeandle, as CFO. Many of you will be familiar with Simon who has been in the business for almost 3 years. To start your scan through a couple of slides. Eric, you're going to be doing the driving. So -- so we'll touch on who we are and what we do as a macro perspective for those that are new to the QuickFee story. We'll do that very briefly and talk through the product, the offering and its unique differentiation. And as I mentioned, we'll be focusing on the U.S. and unwrapping the size of the market opportunity, our path to progress there, how we're going about strategically doing our business and Jennifer will be providing a bit of an in-depth snapshot of that. We'll touch on Australia, of course a much more mature part of our business and a business that I'm pleased to say has returned to pre-pandemic levels of lending, which is terrific, led of course by our founder, Bruce Coons. And lastly, we'll kind of touch on the outlook and some of our key priorities, including our known path to profitability, which no doubt will please investors on the call. So with that, I'd like to hand across to Jennifer. I won't flatter Jennifer with the bio highlights yet again, Jennifer, but obviously, your background at Sage running aspects of that business global product and marketing is a key highlight. Let's kick if over to you, Jennifer, and let's hear a little bit more about the opportunity.

Thank you very much, Dale. So we'll just touch on -- we'll jump into a little bit more about who we are and what we do -- If you want to flip a few slides ahead there. So essentially, we do B2B payments and financing for professional service firms. As you may know, we've been in the Australian market for 14 years, and we've been in the U.S. market for about 7, and we have 2 different types of solutions that we offer to our customers, Pay Now and Pay Later. Our Pay Now option is ACH and EFT as well as credit card and our Pay Now or Pay Later option is our QuickFee financing product, and we'll get into a little bit more detail on both. If you haven't seen our payment portal at all, I'll just flip to the next slide, and this will give you an idea of how we bring it to life one of our customers, which is Munck Wilson Mandala, which is a law firm based in Dallas, Texas. And essentially you just go their payment page, there's a link on their invoices and it shows you three different payment options, which I just ran through with you. Regardless of which of those payment options, you click on, you'll get to the next screen, which is our payment portal. And on our payment portal, again, you're going to select from one of those three payment options, and you have the ability to get a 3-, 6-, 9- or 12-month payment plan, and it shows you what those payment plan amounts are depending on the length of the loan that you want to get or you can pay with ACH and card. A few things that I'll call out, is that for our loan solutions, the firm is essentially on the hook for the loan. So they are the ones backing that loan. If the customer of the firm does not pay, the firm will repay the loan to QuickFee. That's very -- it makes it very easy for the customer because they don't need to get credit checked. And the firm likes it because it's a faster way for them to be able to accelerate those payments. On the credit card side, for the surcharge for credit cards, that's typically picked up by the firm's client. So they're paying those credit cards. Those you typically know fee to the firm. The real key is around the benefits to the professional services firms. And when we're talking about what I just shared with you, the #1 benefit that firms love is they want to be able to get paid faster. So essentially, they're sometimes sitting on receivables for a very long time, sometimes up to three months, and we want them to be able to collect faster. Whether someone wants to pay now or pay later, the firm always gets paid in full upfront regardless of what solution the client picks. The second part is around improving their cash flow. So obviously, when a customer will say to them today, is it possible for me to spread this invoice out over 3 months or 6 months, the firm often will say, yes, absolutely, we can do that. But the firm is putting that loan, if you will. And so when they use QuickFee, they get paid in full upfront and their cash flow sees immediate improvement. Something that we've been hearing from a lot of firms is that increased revenue per client. And so often, professional service firms are in a budget for a particular business. And when you think about accounting, they're typically tax and compliance. That's part of the annual budget. However, advisory services are often not, and that's a rising offering coming from the accounting profession. So with that, when they offer these advisory services, the customer will say, "Well, how am I going to pay for those, that wasn't in my budget and so that's a great place where our financing option comes in and allows them to increase that share of wallet. And of course, all of this is done through our secure portal. So it's very easy for the customer. And with that, I'm going to hand it over to Simon, who's going to walk through information on how we get paid as well as some of our financials.

Thank you, Jennifer. Good day, everyone. So just a summary on where our revenue streams come from, the top 2 lines here are both our Pay Now solutions and the top line being ACH and EFT. And in the U.S., we charge firms up to 0.5% of volume. On average, our revenue yield is about 0.38%. No charge in Australia, the EFT is pretty much free across the whole country. Credit card, and we charge between 3% and 3.5% to the client in the U.S. and we make roughly about 0.15% to 0.2% yield gross margin on card in the U.S. Australia is about 1.5% surcharge. And that is mainly taken up with the interchange costs. So the margin on card in Australia is negligible. Financing, as we said, the client pays the flat fee that's added to the loan installments and currently it's up to about 11.95% for a 12-month loan for the maximum fee; obviously, a smaller fee for a shorter loan term, about the same in both markets. We do have the ability to move that up and down. It generally has little impact on the demand, pricing of this product is quite inelastic. We have increased it recently in order to maintain our margin with increasing interest rates on our facility. It's asset-backed, we borrow to fund those loan settlements. But generally, the increase in that fee doesn't impact demand. A couple of years ago, we reduced it to try and grow demand, didn't have much impact there. We increased it and again, it hasn't negatively impacted demand. And one of the main reasons is the convenience for the client to take out a loan instantly. Whether it's a 10.95% or an 11.95%, that difference is not a barrier necessarily for the client taking out the loan. Q Pay Plan, which incorporates the Jim's plan product in Australia, it's built around that Jim's Group franchise and the franchisee will pay between 6.75% and 8.75% flat fee, a similar model to the financing arrangement. And there are some hosting fees in the Australian market, where the firms pay on average $59 a month just to have that portal there, which does give us some recovery of the costs to operate that, particularly as EFT and card are generally free in Australia. So I thought we'd just recap on the recent half year results, just really underline and emphasize some of the momentum that we've seen certainly in that period. We reported revenue up 47%, up to $6.9 million. In the U.S., Pay Now transaction volumes were up 30% and financing 23%. And we've seen a pleasing recovery in financing in Australia, up 19% for the half and that's increased even further than that in the beginning of this calendar year, we'll get to later. And we've seen some margin improvement in pricing yields against the same period last year, both ACH and card. We continue to have low bad debt levels and our credit risk is -- the model supports that. We haven't deviated from that very, very tight credit protection that we enjoy. And of course, Jennifer joined us late last year as President of North America. A bit more detail on the P&L. We did see substantial reductions in operating costs, down 23% to $8.1 million in the half. And you can see on the right-hand side how with the revenue increases we've seen over the -- at 3 consecutive half years that our EBITDA has improved, and we are well on track to having positive EBITDA, 49% improvement in that H1 FY '23. Our loan book has correspondingly grown 29% over the 12 months and our cash burn being down to, on average, $580,000 for that 6-month period ending December '23 and is reduced more since then. At December, we had $2.4 million in cash on the balance sheet. And under our Northleaf facility, which is -- it operates a bit like an overdraft. It's sort of [ CapEx ], approximately 90% of our loan book. So you can think of it as a facility that we can draw up to 90% of that loan balance. It gave us an additional $7.6 million immediately available to draw at 31 December, and remember, we had $10 million of available cash at our disposal at 31 December. As mentioned, bad debt levels very low, 0.16% of total lending, and we expect that low level to continue into the future. No reason for that to change. And with -- along with the step down in investments in technology and some of the savings we saw in the sales teams over the past 12 months. So the head count is down from 60 to 51 at 31 December. So just talking about liquidity and path to profitability. We reiterate the fact that we are on track to achieve that run rate EBITDA -- cash EBITDA at the month of June 2023, which will lead us into FY '24, and we are targeting for FY '24 to have breakeven or profitable EBITDA as well. What gives us confidence in the June kind of aspiration? And there are some points on the left that really underline that. We've seen year-on-year volume growth. We know it grows year-on-year and we continue to do so. We know Q4 is traditionally the highest quarter in terms of volume and we expect that to be the same this year. Our cost base has reduced. It is stable and predictable and we've seen revenue yield improvements in ACH and card. So there are a couple of just indicative charts on the right there that give us confidence, of not only sort of hitting that [ Q ] number, but also getting close to profitability in FY '24 as well. I'll now hand over to Jennifer, just to talk a bit more about the opportunity in the U.S. market and how we're going to accelerate growth there.

Sure. Thank you. So as you'll see here, when you look at our last 12 months rolling transaction volume, we've had healthy growth over the last number of periods. However, I really believe that we're just scratching the surface on what's possible and the opportunity that lies ahead. There's a few key things that I want to call out for my first 4 months working with QuickFee. Number 1 is around getting the right people in the right seats, and that's been really important as we look to scale the business. We've had a number of changes that have happened in the business over the last few years around leadership, around strategic direction. And through all of that, we have a great team that has been incredibly committed, they've been dedicated to the business, they've been really passionate about what we do and who we serve. And so we're fortunate to have a really committed team on board. In addition, we have people that have spent their careers focused on the payments industry as well as the accounting and legal professional services. So we've got the right mix of people to build that foundation to help us scale. The second piece that I'd call out is around the core focus areas of our business. And over the last couple of years, we've done a number of things that have taken us in a few different directions. We've focused on a number of different industries other than just accounting and legal or even outside of professional services. And we've also had some other product lines that we were supporting like our BNPL product, which has since been discontinued. So what we've done now is we've really focused back on our core business, which is all accounting and legal, some professional services also, but really, the majority is accounting and legal and then doubling down on that. So it's -- we've removed the distraction. We've gone really deep in the verticals that we serve the best. And that's helped us accelerate our development. We'll get into that in just a few minutes. The third piece that I'd call out is around the opportunity that we see in the market, and I see in the U.S. business, particularly, I've been in the accounting profession for over 20 years. So I'm very into and plugged in the industry. And as I went to different professional events or industry events, both accounting and legal, you bring up QuickFee and people would say, "Well, I haven't even heard of that? What do you guys do?" And when you share our story and our value proposition, they're like, that's exactly what my firm needs, how come I've not heard of you before. And so initially, of course, you're disappointed. Because I'd like everyone to have heard of QuickFee but it also represents a significant opportunity that lies ahead of us. And so I think that we're actually just seeing the very tip of the iceberg as it relates to the opportunity in the market that is ours to go after. So as you know, COVID certainly forced the acceleration of digital transformation across all industries and that wasn't any different in the accounting and legal space. However, the U.S. is still way behind the Australian market as it relates to e-invoicing and digital transformation overall. You'll see on the graph on the left, kind of an exhibit or demonstration of that. In Australia, 56% of firms have 90% or more of their invoices that are sent electronically. In the U.S, that same statistic is only 19%. So, we're way behind, but that means that we have a significant opportunity, and we know what the future looks like because we're seeing it in the Australian market. And so we're excited to go after that. And as people are looking to transform to digital payments, we're right there to be able to kind of catch that. I wanted to share with you a quote from Richard McClure, Senior Manager of Operations at Wipfli. For those of you that aren't familiar with that accounting firm, they have over $500 million in annual revenue. They have about 3,000 associates and they experienced about 17% growth, which for an accounting firm in the last fiscal year is significant. And what I like about that is when you look at the size and scale of the firm, they're even calling out that the profession in general needs to get better at automating the whole environment of billing and payments is included in that. And so it's little bit of industry insight and proves that we're on the right track. When you look at the overall strategic opportunity in the U.S. market, our customers today, and these are customers that are transacting with us already, generate almost $9 billion in revenue and only about 12% of that is actually flowing through our payment processing. So the first area of opportunity you'll see is just actually getting more processing volume, more total transaction volume through our existing customer base. The second part is around the $29.2 billion that you see there that is still ours to go after. And so we have a significant opportunity, both to increase penetration and go after new customers. And I'll dig into that a little bit more in the next few slides. Thank you. So one of the key parts to going after and capturing more of the opportunity as it relates to the market and the customers that we serve is around our practice management integrations. When I started with QuickFee, we were just wrapping up our first integration, and we're actually doing about an integration a month right now, which is really -- we've really accelerated that product development. What integration means is that we're stickier to our customers, and it means that we're helping automate that invoicing process and putting a QuickFee payment link on every invoice that goes out. So we're on the reminders, we're on the statements, and we're on the invoice and that ability to penetrate that whole customer base and get beyond that 12% penetration is a huge opportunity as you think about these integrations and our integration solution that we call Connect. When you look at our near-term strategic priorities for the U.S. business, there are 3 key areas that I want to highlight. The first one is around driving organic growth. And I think about this as -- the way I describe it is transactional growth. So its about getting really good at what we're doing today in the area in our go-to-market areas. So sales, customer success, customer retention and marketing. And so we've been skilling up and scaling up our sales team. We've really focused on the customer success function on time to value. And so from when a customer signs a contract to us -- with us, to when they actually have our link on invoices and are receiving payments, how do we bring that down from the time it is at today, which varies greatly in the market, to 7 days or less, and that's what we're looking to do. So as soon as the customer can realize value, we're also realizing that value. When you think about this transactional growth, this requires our resources to scale. Obviously, if you're thinking about new customer acquisition and you're thinking about us doing a one-to-one sales approach, you need more salespeople when you're scaling the business. And so what we're looking at in addition to this transactional growth is what I -- and I'll get into that just moment, but it's exponential growth. And so we have a lot of opportunity to scale the business without adding exponential resources, and we'll get into that in just a moment. On the next slide, we just outlined on the sales and customer success, some of our key growth pillars. As you'll see, 92% of our existing customers are merchants, have ACH and credit card services. So we're actually doing a pretty good job of penetration into our base and selling of our solutions. However, 73% have our financing products. So we do have an opportunity to sell more of our financing solution into our broader customer base. Our -- probably our most significant opportunity, though, is increasing utilization of our financing solution with our existing customers. So we know that our customers, they're not necessarily including it in all of their invoices -- and we just don't have -- we're about 13% of the availability of our -- what we can do around utilization for loans. So huge opportunity for growth there in our highest-margin product. The second one, which I just spoke to when we were talking about integration was around growing our transaction volume for our P&L solutions. So Connect, which allows that integration with all of the practice management and invoicing solutions, allows us to be on every invoice that's sent out, and that makes it really easy for clients to utilize QuickFee as a payment method. And then, of course, we're increasing our new customer acquisitions. So talking about that percentage of the market that we're not selling into today, we're looking to go after new customers and ideally sell them all 3 of our solutions. As you'll see here, when you look at the volume, and I'll call out one example, if you look at the customers that we acquired in FY '19 or fiscal year '19, they're doing 6x the volume now doing when they joined. And so when you look at that and you think about how the business grows, this is without us having our Connect solution. This is without us being on every invoice and you look at that organic growth that's happening in spite of ourselves in some ways. We didn't have all of that cross-sell and upsell activity and program in place, but yet we had really good growth. So we know that we can see this accelerate in a much greater fashion now that we're putting the right strategy and execution behind it. The second strategic priority in the near term in the U.S. business is around strategic partnerships. So if our organic growth, if you think about that as transactional growth, this is where I refer to it as exponential growth. And so when you get into these strategic partnerships, this is where you get a one-to-many opportunity to really scale our business without having to do one-to-one sales. In some cases, we're in an embedded technology partnership, if you will. And so where a practice management or an engagement letter solution may use QuickFee as their payment platform. So that's -- that embedded technology allows us to kind of be in behind the scenes and drive volume in that way. We have strategic partners such as Payroc that powers our credit card solution, and we are expanding our go-to-market activities with them, which has been very successful. There are a number of industry partners that we're joining up with, including the AICPA, as you'll see there, as well as Allinial Global, the California State Society, American Bar Association and others. And some of these were -- we are just in early stages of discussion with, but those alliance organizations are incredibly reputable as it relates to professional services. They turn to them for advice and for guidance and there's a huge opportunity there. And then, of course, leveraging our existing customer base for referrals. In addition to some of what I've mentioned here and the partners that I put logos on the screen for, I'd also say we're in discussions with a number of other strategic partnerships where, for example, a large global software company has the opportunity that they get inquiries from their customers "can I pay my invoice over time." And these are significant software and/or implementation services or professional services that the software companies are providing. And they don't have a pay over time option right now. So the answer is usually no or they end up just carrying the balance on receivables. There's a high, high degree of interest from these large companies to be able to offer a pay-over-time option and QuickFee is of great interest to them. So we're in discussions right now with 2 large companies about becoming that pay-over-time engine for them, which is incredibly exciting. The third near-term strategic priority for the business in the U.S. is around accelerated product development. And so there's a few things here, which is -- we've managed to keep costs relatively flat as it relates to our technology for our fiscal year '23. However, we think that we have an opportunity to actually decrease costs in that area. The reason that we haven't done that already is because of our accelerated integration with practice management solutions and because of the revenue and the value that we know that will drive. And so being able to launch a new integration every month in the market has certainly been something that has helped our credibility with professional service firms and also helped our sales strategy. However, as we get through the bulk of the integrations that I shared with you earlier, we'll be able to decrease the size of the team, but also look at creative ways to bring the costs down such as outsourcing or employing in markets that are not as highly compensated as California as an example. So we have a few things that we're doing there. But at the moment, it's really about accelerating our development to be able to serve more of our customers and be able to go deeper with the customers that we do have. And I just want to leave my section before I hand it back over to Simon with a quote, and this is from one of our customers. And I think it's always powerful to have a customer that shares the value that they're seeing as it relates to our solutions. And it's interesting because when you talk to a number of customers, they originally will tell you, in some cases, that they don't have customers that want to finance, like our customers don't ever ask for financing. So we'll get it, but no one is probably going to use it. And then what you see are quotes like this that come in and they're surprised at how many of their customers are interested in leveraging their cash -- their own cash flow and paying over installments. And so Shawn Fowler from Frazier & Deeter sees a lot of value, not just in our card and ACH, but also in our financing. So -- and we get consistent quotes like this from across the business. And with that, I'll hand it back to Simon to share some more around the Australian business and our strategy and outlook.

Thanks, Jennifer. I'll just show you 1 slide. This is really from the half year results and an update for January and February as well. 19% growth in financing. It is a stable business that the team have got in Australia. It's continually active. We've seen the highest active customer numbers in that period since COVID and 464 firms transacting is actually the highest ever number in that July to December, 6-month period. So there is -- it's a busy little operation in Australia continuing to generate significant amounts of lending volume. We've actually seen a very, very strong January and February as well. So the business is showing really good signs of generating more growth for the rest of this calendar year. With interest rates and inflation, I'm showing no sign of abating at the moment. We see more and more demand for borrowing. So interest rates were increased in November. We're looking at increasing them again at some point in the next few months, just to keep pace with cash rates. And the business will continue to deliver increased contribution to the group. And with that, I'll hand over to Dale just to give us a little bit of a summary of our strategic priorities and outlook for the coming months.

Thanks, Simon. Thank you, Jennifer, for that excellent presentation. There's a lot to pack in. I'm well aware in 25 minutes or so, we've covered a hell of a lot of ground so with a whole bunch of slides. I know they're available for those who want to read in their own time and will have an opportunity for some questions. But just in summary before we get there, what are the key strategic priorities, what are our focus points. Well, clearly, it is on reaching profitability. We recognize the critical importance of managing the cash burn and reducing the cost base. You've seen that in action within the numbers and the outlook suggests that we aren't far away from a profitable month, which is terrific and then an FY '24 forecast, which no doubt has us being a profitable entity rolling forward. That comes from a combination of cost rationalization, but also of increasing volume and you've seen from Jennifer's presentation, the run rate and the growth rates that we are currently achieving and the market opportunity we have to get there. I think that leads me to the second point, which is leveraging our most valuable asset being of our firms. It's the existing firms that we currently work with. It's growing our financing book. Clearly, in the U.S., there is an opportunity. And as Jennifer outlined, 13% penetration amongst those existing firms. We have a lot of growth to still be had amongst the existing firm base, and that's before we can see the new growth and new firm signings, both in the U.S. accounting and legal segments. So we feel there's certainly a lot of ground to be had among new firms, too. We have identified a range of strategic opportunities whether be it associations, industry associations, state-based bodies, national bodies or indeed other vendors, and they're in a range of different stages of discussion around how we can best partner to drill our volume and growth. And we feel like that is, as Jennifer explained, exponential in this opportunity for the business going forward. The unit economics always are something of a big focus for us. We continue to move across as and where possible, and there are opportunities for additional fee revenue coming from our financing products and we do see that driving our growth moving forward. And lastly, I think we've certainly got a sharp focus on enhancing systems redundancy and business continuity. Many would think an odd point to put it on a slide, but I think the recent experience with SVB and banking systems globally suggests that businesses in the payment space such as our need to constantly be vigilant about what we're doing, who we're banking with, who our partners are and building redundancy around that, that remains the important initiative for us. There's 1 more slide to go, Eric, and then we'll open for questions, and that's just a bit of an outlook. So we're looking here at an update for the current quarter to the end of February '23. U.S Pay Now volume up 25% against the corresponding period in the last 12 months. Financing up 36%, again, to the corresponding period and financing Australia, up a healthy 69% against January '22 to January -- to February '22. So, good growth across all segments. We have no reason to believe that won't continue. And as we saw a slide earlier, the increasing cyclical nature of our business leads to a pretty strong and healthy Q4 for us, too. Last point to leave on is, again, we're acutely aware of the importance of profitability. You can see we've got a sharp eye on that, and we're certainly making steady progress. Of course, we look forward to reporting and updating our investors against how we go through the remaining quarter. And then indeed, as we move towards the end of Q4. So thank you for your time. And if there's questions, I'm sure there's a Q&A here, and perhaps we'll throw it over to you Eric, to moderate that.

Thank you, Dale. Thank you, Jennifer, and thank you, Simon. So there are a couple of questions starting to flow through now. And James, if you have a question also, feel free to raise your hand. Maybe I'll just keep 1 off as the questions come in. And one for you, Jennifer, now that you've been in the role for 4-or-so months. You talked through the strategic priorities. But I guess what is it that excites you most from what you've seen so far?

Yes. I think the part that excites me the most is that there is -- whenever you're talking to someone about the solutions that we provide and the benefits we bring to firms there is such a high level of interest and such a low level of awareness about our business and what we do. So I get really excited when you're talking about -- it's a really easy feel like it's almost like -- it's almost too good to be true in some ways like they're like, "Well, this is exactly what I needed. Where have you been?" And so I think we're just at the real tip of the iceberg, and I think that we're just starting to even see the opportunity. I think we've got the right focus. We've got the right foundation for growth and I'm really excited about what the coming year and the next few years looks like for us.

You talked about the legal profession as well. Maybe can you explain a little bit more on that as an opportunity, obviously, QuickFee is deeper in accounting firms. How much opportunity you see in that versus the accounting profession?

Yes, it's a little bit of a different opportunity. When we're working with legal firms, and we've just wrapped up 2 large legal conferences in March. So it's near and dear to my heart at this exact moment because everyone else is busy in tax season. So we've spent a lot of time recently on the legal profession. But they -- a lot of the legal profession, they have the Pay Now solution. So they have ACH and card and for a lot of firms, that's already part of their -- of their day-to-day collection. What they don't have is a financing solution. And so we're actually leading when we go and talk to legal firms, we're leading with financing, and we'll talk about ACH and card as it makes sense. On the side, when you look at accounting -- the accounting profession, a lot of them don't have ACH card or financing. They don't have anything. They're actually just collecting paper checks. And so I think the size of the opportunity is significant on both sides. The buying behavior is different and the buyer persona is different, but they get the value very quickly. I think the sales cycle, we think, is shorter with legal than it is with accounting. And -- but we've got tremendous opportunity on both sides. Legal, we're just barely getting going on. And in the legal space, any -- the competitive options that are out there are -- tend to be more oriented towards consumers as it relates to financing. So they cap the finance at $17,500. And the customer has to get a credit check done, which is not something that firms want to put their customers through or customers want to go through. So we really have -- we have a competitive advantage. It's about increasing awareness and getting in front of the right customers.

Thank you. This one is for you, Simon. It's from an anonymous attendee. Will you need to raise capital in the next 3 months?

Great question. On our current projections, we expect to be able to reach profitability and thus positive cash generation without needing to raise capital.

Question from Ryan Evans perhaps one for you, Dale. Just around this search for a new CEO. I think maybe just sort of elaborate on the current structure and where things are there.

Yes. Thanks for the question. Look, I think the business' view is let's go and identify the appropriate business to lead our U.S. business first and foremost. And in Jennifer, we found the ideal candidate. And so with Bruce managing the Aussie business at home, we feel like we've got both parts of the globe well and truly covered. At this stage, we're not looking to bring those 2 roles underneath a CEO. We want to be a lean and mean run a structure that can be most efficient. And both Jennifer and Bruce are doing a terrific job of managing those domains. So as we sit today, we don't see any need for a Chief Executive Officer.

Thanks, Dale. Another couple of questions. Probably both for you, Simon. Another one from Ryan. Which parts of the business did the 15% full time employee drop from 60 to 51 come from?

From two main areas, the first is sales and marketing, and it probably started in -- around that December '21 period when we pivoted our BNPL sales team from a direct model to an ISO model, it's going through referrers a lot of time. We rationalized the team then. And then further when the BNPL product discontinued, some more sales and marketing costs. And then in April '22, we completed our proprietary tech platform CUBE which enabled us to process all the credit card and ACH transactions through there and give merchants access to visibility there and that enabled us to scale back the tech team as well, probably about 4 heads then.

Thank you. Probably another one for you, Simon, from that question, [ Ben Nassar ]. Just in regards to profitability, what would you see as the major impediments to hitting profitability?

Probably execution in terms of volume growth. Clearly, we need to increase volumes and revenue in order to -- for GP to exceed the cost base. If our OpEx is going to be running somewhere around $16 million to $17 million next year, we need GP to cover that in order to be profitable and that comes from volume. But it also comes from looking at the products that generate the most GP for us. And financing is clearly 20% to 25% higher margin per dollar transacted than ACH and card. So that is why Jennifer and the team in the U.S. is going to be leading with financing. We do currently do over 2.5 to 3x as much lending volume in Australia than we do in the U.S. and the market in the U.S., as you know, is much, much bigger. There is no reason why we cannot do at least as much as we do in Australia, probably more.

Dale, maybe one for you. Obviously, Jennifer and Simon just talked about the size of the market, getting close to profitability, but some of those opportunities perhaps aren't reflected in the share price. Do you think that other companies are probably looking at QuickFee as a takeover potential, given the fact that operating in a large market with huge opportunities and moving towards profitability?

Is that a question, Eric? Are they looking? I don't know. I mean, listen, if I was another company, I'd be looking as well. I think we're grossly undervalued. So I mean my focus, the focus of the Board, the focus of the management team is get our heads down and execute, we've got a tremendous market opportunity. You kind of get too distracted with what's around you. I think we really -- we've got to be focused on building strategic partnerships that can drive volume and scale, as Simon alluded to earlier. As for corporate activity, there's obviously a lot of movement and rationalization across fintech and the market in general. There's some opportunities that have come our way that we've looked at that we've chosen not to proceed with purely on the basis of focus and also on ensuring that we preserve the capital that we need to get ourselves to where we need to go. Naturally, as a Board, we continue to assess opportunities and will do so as they arise. But fundamentally, Eric, I think our job is to continue to execute, build up growth, build volume and demonstrate we can get to profitability. And I think the share price starts taking care of itself. once we achieve those markets.

Thanks, Dale. There's a follow-up question from Ryan to Simon, just in regards to the team and head count. So Eric, previously you made a number of senior hires. Are they all still with the business or have some of them now rolled off?

Yes. Thanks, Ryan. A couple have rolled off specifically. And name names, our Chief Revenue Officer, Aubrey Amatelli left around August last year, with the discontinuation of the BNPL product. It was felt that the size of the organization didn't warrant CRO. We have recently recruited a VP who's running sales now. He used to work at Sage with Jennifer. So introducing more sales skill that actually has experience selling into accountants at the right level, I think it's going to be -- it's a very positive move. Also our Chief Marketing Officer, Jay Alsup, left late last year. And again, that role has not been replaced with our marketing capability in the business at the moment. The previous CEO did introduce some significant talent in our ACH processing and product areas that's still in the business and adding a lot of value. So we still are benefiting from the payment expertise that was introduced into the business from the platform there. But the focus now is very, very much on selling into accountants. That is what Jennifer and new VP of sales, [ Chris ], is driving.

Thanks. Just to remind me if there are any last questions just to type those in using the Q&A function. Jennifer, another 1 for you. If you're successful in executing on these strategic priorities, where would you like to see QuickFee in 3 years time.

Well, I'm not going to share any specific numbers, otherwise, I'll be kicked by Simon probably. But I would say that our -- when we looked at our growth numbers earlier, which are healthy and when we get to that profitability in the near term, we're in really good shape. But again, we got there kind of a little bit in spite of ourselves. We had a lot of different focus areas. We're focused very broadly in the U.S. We weren't specifically going after our target verticals. And so even with the growth rates that you're seeing, I think that we can do exponentially better. So it's -- I don't think that it's -- I don't think our run rate is what I expect -- I certainly didn't come here to continue with the run rate that we have, although it's healthy. It's -- I'm here to exponentially grow the business, and that's -- I'm a believer that it can be done. So expect that from me.

All right. I think that's it for questions. So maybe Dale I'll hand back to you. So thank you, everyone, for your time.

Yes. No, I appreciate that Eric. I think that we appreciate everyone's questions and your attendance. And look, we make every effort to provide as much information as we possibly can in relation to how the business is performing and give you a strong sense of -- of what the outlook is moving forward and where our strategic priority and where our focus is and we look forward to providing that to you guys as we progress. Thank you again.