Repay Holdings Corp (RPAY) Q1 2021 Earnings Call Transcript

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Repay Holdings Corp (RPAY 1.60%)
Q1 2021 Earnings Call
May 10, 2021, 5:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Greetings and welcome to today's earnings conference call being hosted by Repay. With us today are John Morris, Co-Founder and Chief Executive Officer; and Tim Murphy, Chief Financial Officer.

During this call, we will be making forward-looking statements about our beliefs and estimates regarding future events and results. These forward-looking statements are subject to risks and uncertainties, including those set forth in the SEC filings related to today's results and in our most recent Form 10-K filed with the SEC. Actual results might differ materially from any forward-looking statements that we may make today. The forward-looking statements speak only as of today and we do not assume any obligation or intent to update them except as required by law. In an effort to provide additional information to investors, today's discussion will also include references to certain non-GAAP financial measures. An explanation of these non-GAAP financial measures are as well as a reconciliation of these non-GAAP measures to the nearest GAAP financial measures can be found in our earnings release and earnings supplement, each of which are available on the company's IR site.

I would now like to turn the call over to Mr. Morris. Please go ahead.

John Morris -- Co-Founder & Chief Executive Officer

Thank you, operator, and good afternoon, everyone. On today's call I wanted to open with an update on our business for the first quarter followed by a review of how we're executing on our growth strategy, including discussing the acquisition of BillingTree, which we also announced today. I'll then turn it over to Tim to discuss our first quarter in more detail and thoughts on the remainder of 2021.

We are pleased with our performance in the quarter with card payment volume growth of 20%, total revenue growth of 20%, gross profit growth of 22%, and adjusted EBITDA growth of 18%. These strong results were experienced across all of our businesses. On the loan repayment side, auto sales continued to be strong. This coupled with the industry tailwind to digital payments and a large under-penetrated TAM positions auto as one of the fastest growing parts of our business. Our mortgage servicing business also had performed very well this quarter due to increased home buying and refinancing activity. And while we are monitoring the mortgage origination market, we are focused on processing a fairly specific type of transaction within mortgage. So, we believe that we'll continue to be a need for our technology in any macro environment.

During the quarter, we went live with two of the top 10 mortgage servicers and a top 10 credit union on our LIFT Payment and IQ Platform. Our proprietary platform that streamlines and integrates payments and messaging or a seamless experience. We also added a top 10 mortgage servicer to the STX Advisory Board. As a reminder, the STX Advisory Board's goal is to improve and standardize payment flow, eliminate errors, reduce delinquencies and create a better experience for borrowers.

Finally, we also recently completed additional real-time integration activities with Ellie Mae, continue to add customers through this partnership. On the personal loan side, buyers have been strong thus far in 2021. While we expected a seasonal slowdown in Q2, following tax refund in recent stimulus. We still see positive momentum through early May. Our Instant Funding product continues to experience significant adoption with recent months showing record loan funding amounts. Our B2B business also showed strength during the quarter. We now have approximately 50 total B2B software integrations. And on the AP side, we've grown our supplier network to over 71,000, which is up 18% quarter-over-quarter.

We recently announced that we became a participant in the CDK Global Partner Program. In connection with this partnership, we joined the marketplace of applications and integrations that CDK, a leading enabler of end-of-end automotive commerce, develop to help nationwide automotive dealer succeed. Through the integration thousands of automotive dealers will have the ability to automate electronic payments to various vendors and suppliers based on specific invoice data within the CDK system. We recently signed an agreement to classic electronic payables for the public school districts of top 50 US City. Additionally, we are now processing payables for the largest in -room hospitality technology provider to global hospitality brands. Lastly, our TriSource processing business has been performing very nicely, the restrictions lift throughout the country.

We have several processing ISO showing strong growth results with additional customers in the contracting phase. We made solid progress against all our key growth strategies in the first quarter. Sales, technology, and product are the three areas of focus right now.

On the sales side, we've had some great client wins in the quarter, driven by our direct sales force to which we continue to add talent. We recently hired three senior level sales leaders with decades of combined payment experience. ISV Integrations also continued to be strong growth channel for us. During the quarter, we added eight new integrations, bringing our total to 132 at March 31st. We added 15 credit union customers in the quarter, which brings us to 58 representing approximately 635,000 plus members. We also continued to grow existing relationships and add new names to our Buy Now Pay Later pipeline. We understand retail installment sales and believe our payment technology be a great asset -- for the companies in this space.

We've also made progress in the product and technology side. Last quarter, we announced that we recently opened a software development office in Ireland in partnership with a local firm call Protego. We've already hired over 20 software development related staff and they have hit the ground running. We have a lot of technology and product initiatives on our roadmap and many different verticals to attack and we felt this partnership was a great way to quickly get additional resources and throughput. More recently we have been finalizing a partnership -- stakes to enable merchants to accept electronic cash payments. This partnership will allow consumers have access to approximately 60,000 retail locations to make cash payments to merchants on the Repay platform, which transaction supported in real-time. It will add even greater convenience to payers and expands the capabilities of lenders and other merchant types to meet consumer payment preferences.

Now, let's move on to M&A which continues to be an important incremental growth driver for our company. This evening we announced the acquisition of BillingTree is a very exciting announcement as its Repay 's largest and most important transaction today. We have evaluated hundreds of attractive acquisition candidates over the years and we believe that BillingTree -- best combination of technology, distribution, talent and scale to complement our company. BillingTree is a leading provider of omni-channel integrated payments pushed these in biller direct verticals. We posted a separate presentation to the highlight the transaction on our Investor Relations site. BillingTree has two main products CareView, which is a healthcare payments and software platform streamline patient-communication from most patient engagement and allows customers to accept all forms of payments including FSA, HSA and FlexCart.

Next Payrazr, which offers an omnichannel platform that allows customers to accept and reconcile payments using the medium of their choice. BillingTree enhances our position in large and attractive growth markets such as the Healthcare Credit Union Accounts Receivable Management and energy verticals. BillingTree's verticals provide them with access, estimated card payment volume opportunity of 700 billion. Addressable card payment volume and BillingTree's core end market has experienced favourable tailwinds as a result of the COVID-19 pandemic accelerating the paper to digital payment shifts within BillingTree's biller direct verticals.

BillingTree meaningfully expands our scale, contributing over 4.4 billion in card payment volume, 60 million in revenue and 26 million in EBITDA before synergies pro forma for the full-year 2021. BillingTree serves over 1,650 clients including over 120 credit union. They have customers across multiple attractive end markets with industry-leading retention metrics. Pro forma for the full year impact of the BillingTree acquisition, we expect to have over 22 billion in card payment volume over 2,455 million in revenue and over 105 million in adjusted EBITDA and over 175 via seat.

The BillingTree acquisition will also strengthen our existing product suite of deeply integrated custom-tailored payment and software solutions for enterprise -- healthcare credit unions and ARM industry. The solutions are tightly integrated with over 50 software platforms. The acquisition is expected to expand our software partner integrations to 175. Additionally BillingTree also has a highly recurring revenue model with 110% average net volume retention and strong margins. We expect the transaction to be accretive to adjusted EPS in 2021 before synergies and expect further shareholder high -- creation from synergy opportunities as the combined company. The scale, capabilities and infrastructure of the -- platform represent significant opportunities for cost savings and increased efficiencies.

As a result of processing cost reductions and operational expense rationalization, we expect to realize annualized synergies of approximately 5 billion. We are incredibly excited about this highly strategic acquisition having delivered on the promise we made to our shareholders earlier this year and we raised significant proceeds to pursue M&A. We will continue to evaluate attractive M&A prospects maintain a very active pipeline of additional opportunities in fact that there will continue to be mid-market consolidation across the payments industry.

With that, I'll turn it over to Tim to discuss the financials in greater detail. Tim?

Tim Murphy -- Chief Financial Officer

Thank you, John. Now let's move on to our Q1 financial results before I review our revised financial guidance for 2021. As John mentioned in the first quarter Repay delivered strong results across all of our key metrics. Card payment volume was 4.6 billion, an increase of 20% over the prior year's first quarter. Total revenue was 47.5 million, an increase of 20% over the prior year first quarter. Ventanex, cPayPlus and CPS contributed approximately 4.9 million of incremental revenue during the first quarter.

Moving onto expenses in the quarter. Other cost of services were 12.5 million compared to $10.8 million in the first quarter of 2020. The incremental other cost of services from Ventanex, cPayPlus and CPS were 1.7 million for Q1. Gross profit was $35 million, an increase of 22% over the prior year's first quarter. On an organic basis, we saw gross profit growth of 11% compared to the first quarter of 2020. This organic growth was primarily driven by strength across our loan repayment verticals as well better-than-expected performance in our TriSource back-end processing business. SG&A was $23.4 million compared to $18.2 million in the first quarter of 2020. First quarter net loss was $18 million compared to a net loss of $13.2 million in the first quarter of 2020. First quarter adjusted net income was $15.1 million or $0.18 per share.

Lastly, first quarter adjusted EBITDA was $20.5 million, an increase of 18% over the prior year first quarter. First quarter adjusted EBITDA as a percentage of total revenue was 43% compared to 44% in the prior year first quarter. This increase in adjusted EBITDA was a result of organic growth and contributions from acquired businesses as well as continued focus on cost management.

As John mentioned, today we announced the acquisition of BillingTree for $503 million consisting of $275 million in cash, which will be financed with cash on hand and $228 million in stock. This will be our largest acquisition to-date. We also anticipate a tax benefit of approximately $20 million. This deal will be immediately accretive to earnings before synergies and is a great example of why we chose to access the capital markets in January. Transaction is expected to close by the end of the second quarter of 2021, subject to certain customary closing conditions. Combined net leverage is expected to be approximately 2.9 times on a post-transaction basis a very comfortable level, which will allow us to continue to fund both organic and inorganic opportunities. As of April 30 pro forma for BillingTree who will have $118 million of cash on the balance sheet and access to $125 million of undrawn revolver capacity for total liquidity amount of $243 million. As of April 30th pro forma for BillingTree, we will have approximately 98.4 million shares outstanding on a fully diluted basis.

Finally, moving on to our outlook for 2021. Due to the strong results we've experience across all of our business year-to-date, coupled with our current momentum that will drive further acceleration in the second half of this year. We are updating our outlook for 2021 excluding BillingTree. We are now expecting volume to be between $17.7 billion and $18.2 billion. Total revenue to be between $180 million and $190 million. Gross profit to be between $135 million and $141million. And lastly, adjusted EBITDA to be between $76 million and $81 million.

Now, including the impact to BillingTree, which we assume will close on July 1, we expect the following for 2021. Volumes to be between $19.9 billion and $20.4 billion. Total revenue to be between $210 million and $220 million. Gross profit to be between $159 million and to $165 million and lastly, adjusted EBITDA to be between $91 million and $96 million. Please note, this includes approximately $2 million of expected pro forma synergies for the final six months of 2021. As with prior quarters, this range assumes no further unforeseen COVID related impacts, which could create substantial economic duress during the year. We are pleased to welcome BillingTree to the Repay family and look forward to an exciting remainder of 2021 along with accelerated growth in the outer years.

I'll now turn the call back over to the operator to take your questions. Operator?

Questions and Answers:

Operator

And at this time we will be conducting a question-and-answer session. [Operator Instructions] Our first question is from Tim Chiodo with Credit Suisse. Please proceed with your question.

Timothy Chiodo -- Credit Suisse -- Analyst

Thanks a lot for taking the question. I wanted to dig into some of the client relationships came over with BillingTree and also the ISV. So I saw over 1600 clients and 50 ISVs. Maybe you could just talk a little bit about how penetrated those are relative to maybe the existing Repay base of ISVs and merchants, how much runway is there. Was there any overlap is that 50 a net number? Is that a gross number? An

Operator

Greetings and welcome to today's earnings conference call being hosted by Repay. With us today are John Morris, Co-Founder and Chief Executive Officer; and Tim Murphy, Chief Financial Officer.

During this call, we will be making forward-looking statements about our beliefs and estimates regarding future events and results. These forward-looking statements are subject to risks and uncertainties, including those set forth in the SEC filings related to today's results and in our most recent Form 10-K filed with the SEC. Actual results might differ materially from any forward-looking statements that we may make today. The forward-looking statements speak only as of today and we do not assume any obligation or intent to update them except as required by law. In an effort to provide additional information to investors, today's discussion will also include references to certain non-GAAP financial measures. An explanation of these non-GAAP financial measures are as well as a reconciliation of these non-GAAP measures to the nearest GAAP financial measures can be found in our earnings release and earnings supplement, each of which are available on the company's IR site.

I would now like to turn the call over to Mr. Morris. Please go ahead.

John Morris -- Co-Founder & Chief Executive Officer

Thank you, operator, and good afternoon, everyone. On today's call I wanted to open with an update on our business for the first quarter followed by a review of how we're executing on our growth strategy, including discussing the acquisition of BillingTree, which we also announced today. I'll then turn it over to Tim to discuss our first quarter in more detail and thoughts on the remainder of 2021.

We are pleased with our performance in the quarter with card payment volume growth of 20%, total revenue growth of 20%, gross profit growth of 22%, and adjusted EBITDA growth of 18%. These strong results were experienced across all of our businesses. On the loan repayment side, auto sales continued to be strong. This coupled with the industry tailwind to digital payments and a large under-penetrated TAM positions auto as one of the fastest growing parts of our business. Our mortgage servicing business also had performed very well this quarter due to increased home buying and refinancing activity. And while we are monitoring the mortgage origination market, we are focused on processing a fairly specific type of transaction within mortgage. So, we believe that we'll continue to be a need for our technology in any macro environment.

During the quarter, we went live with two of the top 10 mortgage servicers and a top 10 credit union on our LIFT Payment and IQ Platform. Our proprietary platform that streamlines and integrates payments and messaging or a seamless experience. We also added a top 10 mortgage servicer to the STX Advisory Board. As a reminder, the STX Advisory Board's goal is to improve and standardize payment flow, eliminate errors, reduce delinquencies and create a better experience for borrowers.

Finally, we also recently completed additional real-time integration activities with Ellie Mae, continue to add customers through this partnership. On the personal loan side, buyers have been strong thus far in 2021. While we expected a seasonal slowdown in Q2, following tax refund in recent stimulus. We still see positive momentum through early May. Our Instant Funding product continues to experience significant adoption with recent months showing record loan funding amounts. Our B2B business also showed strength during the quarter. We now have approximately 50 total B2B software integrations. And on the AP side, we've grown our supplier network to over 71,000, which is up 18% quarter-over-quarter.

We recently announced that we became a participant in the CDK Global Partner Program. In connection with this partnership, we joined the marketplace of applications and integrations that CDK, a leading enabler of end-of-end automotive commerce, develop to help nationwide automotive dealer succeed. Through the integration thousands of automotive dealers will have the ability to automate electronic payments to various vendors and suppliers based on specific invoice data within the CDK system. We recently signed an agreement to classic electronic payables for the public school districts of top 50 US City. Additionally, we are now processing payables for the largest in -room hospitality technology provider to global hospitality brands. Lastly, our TriSource processing business has been performing very nicely, the restrictions lift throughout the country.

We have several processing ISO showing strong growth results with additional customers in the contracting phase. We made solid progress against all our key growth strategies in the first quarter. Sales, technology, and product are the three areas of focus right now.

On the sales side, we've had some great client wins in the quarter, driven by our direct sales force to which we continue to add talent. We recently hired three senior level sales leaders with decades of combined payment experience. ISV Integrations also continued to be strong growth channel for us. During the quarter, we added eight new integrations, bringing our total to 132 at March 31st. We added 15 credit union customers in the quarter, which brings us to 58 representing approximately 635,000 plus members. We also continued to grow existing relationships and add new names to our Buy Now Pay Later pipeline. We understand retail installment sales and believe our payment technology be a great asset -- for the companies in this space.

We've also made progress in the product and technology side. Last quarter, we announced that we recently opened a software development office in Ireland in partnership with a local firm call Protego. We've already hired over 20 software development related staff and they have hit the ground running. We have a lot of technology and product initiatives on our roadmap and many different verticals to attack and we felt this partnership was a great way to quickly get additional resources and throughput. More recently we have been finalizing a partnership -- stakes to enable merchants to accept electronic cash payments. This partnership will allow consumers have access to approximately 60,000 retail locations to make cash payments to merchants on the Repay platform, which transaction supported in real-time. It will add even greater convenience to payers and expands the capabilities of lenders and other merchant types to meet consumer payment preferences.

Now, let's move on to M&A which continues to be an important incremental growth driver for our company. This evening we announced the acquisition of BillingTree is a very exciting announcement as its Repay 's largest and most important transaction today. We have evaluated hundreds of attractive acquisition candidates over the years and we believe that BillingTree -- best combination of technology, distribution, talent and scale to complement our company. BillingTree is a leading provider of omni-channel integrated payments pushed these in biller direct verticals. We posted a separate presentation to the highlight the transaction on our Investor Relations site. BillingTree has two main products CareView, which is a healthcare payments and software platform streamline patient-communication from most patient engagement and allows customers to accept all forms of payments including FSA, HSA and FlexCart.

Next Payrazr, which offers an omnichannel platform that allows customers to accept and reconcile payments using the medium of their choice. BillingTree enhances our position in large and attractive growth markets such as the Healthcare Credit Union Accounts Receivable Management and energy verticals. BillingTree's verticals provide them with access, estimated card payment volume opportunity of 700 billion. Addressable card payment volume and BillingTree's core end market has experienced favourable tailwinds as a result of the COVID-19 pandemic accelerating the paper to digital payment shifts within BillingTree's biller direct verticals.

BillingTree meaningfully expands our scale, contributing over 4.4 billion in card payment volume, 60 million in revenue and 26 million in EBITDA before synergies pro forma for the full-year 2021. BillingTree serves over 1,650 clients including over 120 credit union. They have customers across multiple attractive end markets with industry-leading retention metrics. Pro forma for the full year impact of the BillingTree acquisition, we expect to have over 22 billion in card payment volume over 2,455 million in revenue and over 105 million in adjusted EBITDA and over 175 via seat.

The BillingTree acquisition will also strengthen our existing product suite of deeply integrated custom-tailored payment and software solutions for enterprise -- healthcare credit unions and ARM industry. The solutions are tightly integrated with over 50 software platforms. The acquisition is expected to expand our software partner integrations to 175. Additionally BillingTree also has a highly recurring revenue model with 110% average net volume retention and strong margins. We expect the transaction to be accretive to adjusted EPS in 2021 before synergies and expect further shareholder high -- creation from synergy opportunities as the combined company. The scale, capabilities and infrastructure of the -- platform represent significant opportunities for cost savings and increased efficiencies.

As a result of processing cost reductions and operational expense rationalization, we expect to realize annualized synergies of approximately 5 billion. We are incredibly excited about this highly strategic acquisition having delivered on the promise we made to our shareholders earlier this year and we raised significant proceeds to pursue M&A. We will continue to evaluate attractive M&A prospects maintain a very active pipeline of additional opportunities in fact that there will continue to be mid-market consolidation across the payments industry.

With that, I'll turn it over to Tim to discuss the financials in greater detail. Tim?

Tim Murphy -- Chief Financial Officer

Thank you, John. Now let's move on to our Q1 financial results before I review our revised financial guidance for 2021. As John mentioned in the first quarter Repay delivered strong results across all of our key metrics. Card payment volume was 4.6 billion, an increase of 20% over the prior year's first quarter. Total revenue was 47.5 million, an increase of 20% over the prior year first quarter. Ventanex, cPayPlus and CPS contributed approximately 4.9 million of incremental revenue during the first quarter.

Moving onto expenses in the quarter. Other cost of services were 12.5 million compared to $10.8 million in the first quarter of 2020. The incremental other cost of services from Ventanex, cPayPlus and CPS were 1.7 million for Q1. Gross profit was $35 million, an increase of 22% over the prior year's first quarter. On an organic basis, we saw gross profit growth of 11% compared to the first quarter of 2020. This organic growth was primarily driven by strength across our loan repayment verticals as well better-than-expected performance in our TriSource back-end processing business. SG&A was $23.4 million compared to $18.2 million in the first quarter of 2020. First quarter net loss was $18 million compared to a net loss of $13.2 million in the first quarter of 2020. First quarter adjusted net income was $15.1 million or $0.18 per share.

Lastly, first quarter adjusted EBITDA was $20.5 million, an increase of 18% over the prior year first quarter. First quarter adjusted EBITDA as a percentage of total revenue was 43% compared to 44% in the prior year first quarter. This increase in adjusted EBITDA was a result of organic growth and contributions from acquired businesses as well as continued focus on cost management.

As John mentioned, today we announced the acquisition of BillingTree for $503 million consisting of $275 million in cash, which will be financed with cash on hand and $228 million in stock. This will be our largest acquisition to-date. We also anticipate a tax benefit of approximately $20 million. This deal will be immediately accretive to earnings before synergies and is a great example of why we chose to access the capital markets in January. Transaction is expected to close by the end of the second quarter of 2021, subject to certain customary closing conditions. Combined net leverage is expected to be approximately 2.9 times on a post-transaction basis a very comfortable level, which will allow us to continue to fund both organic and inorganic opportunities. As of April 30 pro forma for BillingTree who will have $118 million of cash on the balance sheet and access to $125 million of undrawn revolver capacity for total liquidity amount of $243 million. As of April 30th pro forma for BillingTree, we will have approximately 98.4 million shares outstanding on a fully diluted basis.

Finally, moving on to our outlook for 2021. Due to the strong results we've experience across all of our business year-to-date, coupled with our current momentum that will drive further acceleration in the second half of this year. We are updating our outlook for 2021 excluding BillingTree. We are now expecting volume to be between $17.7 billion and $18.2 billion. Total revenue to be between $180 million and $190 million. Gross profit to be between $135 million and $141million. And lastly, adjusted EBITDA to be between $76 million and $81 million.

Now, including the impact to BillingTree, which we assume will close on July 1, we expect the following for 2021. Volumes to be between $19.9 billion and $20.4 billion. Total revenue to be between $210 million and $220 million. Gross profit to be between $159 million and to $165 million and lastly, adjusted EBITDA to be between $91 million and $96 million. Please note, this includes approximately $2 million of expected pro forma synergies for the final six months of 2021. As with prior quarters, this range assumes no further unforeseen COVID related impacts, which could create substantial economic duress during the year. We are pleased to welcome BillingTree to the Repay family and look forward to an exciting remainder of 2021 along with accelerated growth in the outer years.

I'll now turn the call back over to the operator to take your questions. Operator?

Operator

And at this time we will be conducting a question-and-answer session. [Operator Instructions] Our first question is from Tim Chiodo with Credit Suisse. Please proceed with your question.

Timothy Chiodo -- Credit Suisse -- Analyst

Thanks a lot for taking the question. I wanted to dig into some of the client relationships came over with BillingTree and also the ISV. So I saw over 1600 clients and 50 ISVs. Maybe you could just talk a little bit about how penetrated those are relative to maybe the existing Repay base of ISVs and merchants, how much runway is there. Was there any overlap is that 50 a net number? Is that a gross number? Any extra context there would be really helpful?

Tim Murphy -- Chief Financial Officer

Sure. This is Tim. Yes. So we are definitely excited about their software relationships. They have them across all of these verticals healthcare, credit unions, ARM and energy. The 50 number, there is probably a few overlap there, we noted in the earnings supplement. I think it's maybe in mid-40s if you exclude the -- and we're getting access to customers and some very high quality agencies -- in these end markets and we think there's still a lot of penetration left. We think they're pretty under penetrated in the existing relationships similar to our situation. And so just like we've put risk -- for further penetrating those relationships will be doing something similar with BillingTree. So that's a big opportunity for us and we like the fact that they go to market in a very similar to us in terms of an integrated omni-channel experience. So that was a big part of our thesis here is just integrated approach you're getting access to a lot of different merchants within these end markets.

Timothy Chiodo -- Credit Suisse -- Analyst

Okay, great. Thanks a lot, Tim. A brief follow-up somewhat related also on the synergy side is the extent is there an extent that you might be able to cross sell some of the B2B accounts payable side because CPS, cPayPlus into this existing base of merchants and or ISV?

John Morris -- Co-Founder & Chief Executive Officer

Yes, good afternoon. We do think there's a great opportunity there. Obviously we see some opportunity with our existing B2B player -- platform with our CPP and CPS. Our CPS platform already has several opportunities that it uses already for the healthcare where all specifically hospitals, etcetera as you can see with BillingTree it has healthcare and it's current offering. And so we do think there is an opportunity to cross-sell on both sides of that. We're still early on in evaluating some of our needs there, but we think that does give us great opportunity. So even across all the other verticals. We think there is also an opportunity to do some things on the B2B side as we add that into some of our integrated offerings.

Timothy Chiodo -- Credit Suisse -- Analyst

Great. Thanks a lot for taking the question Tim and John.

Operator

And our next question is from Craig Maurer with Autonomous Research. Please proceed with your question.

Craig Maurer -- Autonomous Research -- Analyst

Yes, hi, thanks for taking the questions, guys. So one unrelated to the deal, which is you discussed auto sales continuing to be strong and it's the fast growing piece of Repay. So, can you discuss how that's weighing on take rate. Second, regarding the deal, can you discuss if there are any lockups on the 10% that part Parthenon Capital own following the transaction? Thanks.

John Morris -- Co-Founder & Chief Executive Officer

Yes, to the first question, yes, auto continues to be really strong, Craig, growing 20%, 25% plus as it has been. And I'd say that the take rate impact is not too material as you can see the take rate this quarter was similar to prior quarters and we expect that to continue. So I don't think that's going to be material impact and we also get just a lot more volume in that end market and so that flows through to gross profit. And so in terms of lockup still be a six-month lockup with Parthenon. And so and that's -- it's pretty straightforward.

Craig Maurer -- Autonomous Research -- Analyst

Okay, thank you.

Operator

And our next question is from Sanjay Sakhrani with KBW. Please proceed with your question.

Sanjay Sakhrani -- KBW -- Analyst

Thanks and congrats on the deal. I guess first question, just on the core trends. I was wondering if you could just maybe call out anything specific that you saw during the quarter, leading you to be more optimistic for the back part of the year and any specific impacts related to stimulus?

John Morris -- Co-Founder & Chief Executive Officer

Yes. So, organic growth in the first quarter was stronger than we anticipated 11%, that's something that we're excited about, there was definitely a benefit from stimulus in late March. But as we expected due to seasonality around tax refunds and that stimulus volume dropped off into April and early May. But it's actually been a little bit better than we expected. So both those things combined led us to be more optimistic about the rest of the year. We also have a lot of strength in our TriSource back-end processing business, we have some ISOs as customers there that have -- are continuing to ramp and grow and we're excited about that and we also have some pretty large new customers that we're contracting right now. So that gives us confidence as well. So those are things that I would call out and again stimulus had a positive impact for us in Q1 and we're seeing the drop-off in Q2 as expected, but not to the same extent that maybe we expected. So that's another positive.

Tim Murphy -- Chief Financial Officer

Yes, we're seeing some nice wins on the B2B side as well.

Sanjay Sakhrani -- KBW -- Analyst

Okay, that's great. That's great to hear. And then just a quick question on BillingTree. I see in the slide sort of the financial profile, but can you speak to how you see the growth rates on revenues for that business and how much more improvement you might be able to see on that EBITDA margin of in the low '40s? Thanks.

John Morris -- Co-Founder & Chief Executive Officer

Yes, sure. So you can see the growth rates here in the deck, 18% for volume, 15% for gross profit, 15% for adjusted EBITDA revenues in a similar range kind of in the low to mid-teens. And they have 80% plus percent gross profit margins, which is really strong. So actually a little bit higher than us, so BillingTree has solid growth and strong gross profit margins then they're currently in the mid '40s from adjusted EBITDA perspective. We think that could with synergy realization tick up into the high '40s maybe even hit 50% as we realized some of these synergies. So very strong financial profile both from a growth perspective and a margin perspective.

Sanjay Sakhrani -- KBW -- Analyst

And just to clarify it, you think that business can continue to grow in the high teens at '21?

John Morris -- Co-Founder & Chief Executive Officer

I think mid to high teens is where we think it can grow and have those kind of margins with some expansion with the synergy realization.

Sanjay Sakhrani -- KBW -- Analyst

Got it. All right, great. Thanks.

Operator

Our next question is from Andrew Schmidt with Citigroup. Please proceed with your question.

Andrew Schmidt -- Citigroup -- Analyst

Hey, John and Tim. Thanks for having me on the call and congrats on the BillingTree acquisition. I wanted to start with the -- this question on the personal loan protocol. It sounds like obviously that's trending better than expected into the second quarter here. Have you sort of revised the expectation for that into the back half especially as we come up against some of the easier comps or is it more of a normalization back to kind of run rate levels. Just more context in terms of what you're contemplating in the personal vertical in the back half would be great? Thanks.

Tim Murphy -- Chief Financial Officer

Yes, I mean, we are -- we do feel good about where we are so far in Q2 like we talked about, it's a little bit better than expected. So our initial assumption around macro was Q3 recovery in general and then that would lead to stronger growth within loan repayments and specifically personal loans starting in Q3 and Q4 particularly given easier comps versus last year in those quarters and then that leading to a very strong exit rate into 2022. So we still think that's the case. If the trend so far in Q2 holds up for the rest of the quarter, maybe some of that growth that we anticipate it could be accelerated more in Q3 and Q4 going into next year. So we're definitely encouraged by what we see so far.

Andrew Schmidt -- Citigroup -- Analyst

Got it. Thank you for that. And with BillingTree it sounds like you picked up some good technology here. Is there an opportunity to leverage some of this technology across the other verticals that you're in or is it just more sort of isolated to these new verticals that you're getting into any benefits from just leveraging their tech platform from a direct biller perspective? Thanks.

John Morris -- Co-Founder & Chief Executive Officer

Yes. So, yes, very good technology, the technology stack here fits really well with our technology stack, we both are omni-channel. Some of the ways that we've built our platforms are very similar. That's going to make the integration to our target operating technology model much easier as well. We have the opportunity, we used some of the same providers on the authorization engine side of it and obviously there's going to be some back-end opportunities since we own TriSource, but on the technology stack side specifically if you think about the verticals that they're serving healthcare, they give us a more combined healthcare front-end, biller direct software technology that's going to fit well for us as going to really enhance some things we want to do on that side of it, they have a few some of their other verticals especially energy as well with, that's going to give us some additional ability to do some things we don't currently do. But overall, if it fits well, we still obviously our technology is built really our tech stack. So this will fit in well with it, but yes, they do give us some additional abilities there and the key integrations really critical as well as we continue to expand specifically in the healthcare and credit unions.

Andrew Schmidt -- Citigroup -- Analyst

That's great to hear. Thank you very much guys.

Operator

And our next question is from Peter Heckmann with DA Davidson. Please proceed with your question.

Peter Heckmann -- Davidsona -- Analyst

Hi, gentlemen. A lot of number came through. I'm just trying to reconcile them, but it looks like a great deal, when you're talking about your vertical presence, post BillingTree acquisition, it looks like I guess you've segmented BillingTree and healthcare accounts receivable B2B. But if we were to include all of BillingTree in B2B, if you're looking at what almost $9 billion of combined volume primarily. I guess how would that on a pro forma basis breakdown between AP and AR and what's your vision for kind of conforming to maybe one platform over time?

John Morris -- Co-Founder & Chief Executive Officer

Yes. So the ARM space is not actually what we would consider traditional B2B and so we wouldn't include that in that part of the business and that would be more on the sort of business process outsourcing for enterprise customer looking to help them get paid more quickly and efficiently.

Peter Heckmann -- Davidsona -- Analyst

Okay.

John Morris -- Co-Founder & Chief Executive Officer

And then but the payments themselves are actually coming from consumer. So it's more on the acceptance side. And so, but, yes, that's a very large market opportunity collectively across all these verticals that $700 million of annual payment volume opportunity. So you remove some kind of duplicate volume and in credit unions for example, increase our total addressable market to $5.3 trillion of annual payment volume up. So very, very additive to total addressable market. And then a lot of benefits, within each of these verticals from a software integration and technology.

Tim Murphy -- Chief Financial Officer

Yes. And also on a post-acquisition basis, if you're looking at business mix and you'll see this in the investor presentation loan repayments about 50% of payment volume, B2B is about 20%, ARMs about 10%, Healthcare is about 10% and others about 10%.

Peter Heckmann -- Davidsona -- Analyst

Okay, got it. That's really helpful. And then just in terms of thinking about the close any non -- I seem just regular customary approvals needed before close it looks like you think you can get this closed in the next six weeks or so?

John Morris -- Co-Founder & Chief Executive Officer

Yes, just standard customary closing conditions and expectations were close by end of Q2.

Peter Heckmann -- Davidsona -- Analyst

Okay, thanks so much.

Operator

And our next question is from Ramsey El-Assal with Barclays. Please proceed with your question.

Robert Arancio -- Barclays -- Analyst

Hey, guys. This is Robert on for Ramsey. Question on TriSource business, you had mentioned that this is kind of ramping back up and growing nicely now. As the business kind of starts to rebound. How do you see the revenue mix of that core portfolio ex-BillingTree reshaping. I think TriSource was $6 million or $7 million business pre-COVID, but how you grow that business in a post-COVID scenario?

John Morris -- Co-Founder & Chief Executive Officer

Yes, hey, it's substantially higher than that and really the part of the business, the volume based part of the business has recovered to kind of pre-COVID levels, but really the business such really doing well the back end processing business where we have customers that are ISOs and we help them with clearing and settlement. And so that's the part of the business that is really continue to perform nicely, and so it's much higher that $6 million to $7 million that you mentioned in terms of 2021 and look at the BillingTree investor presentation, we still include that in other and even when we strip ARM out of other now into its own bucket, the total other is still about 10% and that mostly is TriSource.

Robert Arancio -- Barclays -- Analyst

Got it. Okay, that's helpful. And then second is a follow-up question on the energy vertical. So you guys acquired BillingTree portfolio leased had 10% related to energy. So kind of can you help us understand your go-forward strategy and energy are you guys looking to expand further into the vertical or is that more so asset that you acquired as part of the deal?

John Morris -- Co-Founder & Chief Executive Officer

It's an asset that the BillingTree has had for a number of years. It's actually in addition to payments to some software and so we've talked in the past about potentially buying software companies. We've traditionally only focused on buying payments company, but this is a good example of, one, where there is a payment monetization opportunity within the software within the energy space. So they're providing software and payments to fuel and propane dealers and they're doing it in a bundled way. So we think there's a lot of volume to go get that's being processed on the software side, but the payments are not happening. So that's part of the strategy going forward is to try to monetize those payments further.

Robert Arancio -- Barclays -- Analyst

Got it. That's helpful. Thank you.

Operator

And our next question is from Joseph Vafi with Canaccord. Please proceed with your question.

Joseph Vafi -- Canaccord -- Analyst

Hey, guys. Good afternoon and congrats on the BillingTree add it sounds like a nice asset. Let me dig a little bit more in the personal loans. What are some of your customers, I'm sorry, on the auto loans we could looks a little bit on what your customers are saying about their loan books right now. And then the follow-up is obviously BillingTree is pretty big are you going to scale back M&A for a little bit, what do you think there on the specific front? Thank you.

Tim Murphy -- Chief Financial Officer

Yes. Auto lenders, feel very good about their books right now, they're growing nicely and have been, don't think credit quality is really an issue still, even with the growth. I think that they're just finding ways to engage more digitally with their consumers, which fits really well with our payment technology, we allow them to have that digital engagement through payments and so that's just continue to be a theme that we've seen as our auto lending customers try to build that more into their offering and that really helps us in terms of penetration and growth within existing customers. So I'd say that's still continues to be very strong. And then in terms of additional M&A. We have an active pipeline, we're sitting at 2.9 times, net leverage, which is pretty comfortable level for us. We have access to about $243 million liquidity between 118 of cash on the balance sheet after the BillingTree acquisition and access to $125 million undrawn revolver. So we think we have capacity for future M&A, we have an active pipeline, we're still looking at deals in B2B. We're looking at potential healthcare opportunities in other verticals that makes sense. And have a lot of the qualities that BillingTree has, so have an active M&A pipeline.

Joseph Vafi -- Canaccord -- Analyst

Right. Thanks, Tim.

Operator

And our next question is from Bob Napoli with William Blair. Please proceed with your question.

Bob Napoli -- William Blair -- Analyst

Thank you. Good transaction. It looks like just the stock is they're adopting share count is it, I mean, is that, what are the exact number of shares that Parthenon is getting?

Tim Murphy -- Chief Financial Officer

Yes. So it's just over $10 million shares.

Bob Napoli -- William Blair -- Analyst

Okay. That's a locked in share number, right.

Tim Murphy -- Chief Financial Officer

Yes. It was based on a 12-day VWAP leading up to signing.

Bob Napoli -- William Blair -- Analyst

Great. Okay, thank you. Now there is, I mean, I think there is going a little bit about BillingTree and looking at your presentation, there's some decent overlap. I mean I think in parts of the business. And I mean, you're not an energy, but the ARM and credit union is credit union primarily auto in the ARM is that primarily personal loans. I know it's some like debt recovery.

Tim Murphy -- Chief Financial Officer

Credit unions is very much additive. They have -- we had about end of the quarter about 58 customers they have over 120. We have some software relationships in credit unions and we don't have that we've been talking too. So that's we've really like that -- that's a great vertical and they've done well there. And so that was a big part of the thesis, and then accounts receivable management, they are really a leader in that space and have done, they have great technology, they're great relationships both with merchants and with software providers and again that's very additive to us and we think that there have a ton of great relationships. And then, we're really excited about is healthcare.

And as you, recall, we're in healthcare on the AP side we were processing payments for third-party administrators from insurance companies to providers and also processing AP for hospital systems. This gets us more into the patient side with consumer-driven payments where whether maybe at a hospital or whether doctor or dental practice, this gets us into that part of healthcare. There's a lot of different parts to healthcare. But we think it's the $420 billion market opportunity. It's obviously growing very quickly as consumers decided to take more control over their healthcare choices. So that's where we're really excited about, and that's where a lot of the growth we focus. But they also have strength these other verticals as well, Bob.

Bob Napoli -- William Blair -- Analyst

Okay, thank you.

John Morris -- Co-Founder & Chief Executive Officer

Yes, Bob, the other thing I would add is -- sorry about that -- the other thing I would add is the credit unions would lean toward the auto lending.

Bob Napoli -- William Blair -- Analyst

Okay, great and then in healthcare, is that revenue cycle management is that competing with like Flywire or who would be some of the competition in that healthcare space?

Tim Murphy -- Chief Financial Officer

That revenue cycle management kind of overlap between healthcare and ARM, but we'd be competing with maybe like it InstaMed and healthcare that's a name that we also see in the Ventanex business. So that's one that we see from time to time and there's some of the private companies that would come across, but definitely there definitely in RCM space and I can set it kind of straddles healthcare and receivables management.

Bob Napoli -- William Blair -- Analyst

Thanks. And then last question just I mean from a cultural perspective. How does this fit. I mean it's a good sized organization with some obviously some good leadership, but how does that fit together. I mean I guess the healthcare, the energy teams clearly, I mean, how does -- how do you feel about the culture and how this fit together. I mean, you will have a huge amount of cost synergies in there. So it's -- that's more growth oriented I guess.

Tim Murphy -- Chief Financial Officer

Yes, sure. So we actually think our culture fit well together. If I'm trying to find an optimal opportunity that strategically and it's very compelling as a combination. There is a lots of one for once we do that are just makes a lot of sense be attractive from a financial perspective, but also very attractive from our ability to integrate a lot of the different verticals they serve. We understand exactly what they're doing. The omnichannel they have, fits well with our omnichannel, our technology fits well, this makes a lot of sense for us and obviously they've built a really nice company. Parthenon has put in a first class team there, who has done that. Yes, I mean this is a scenario where we have to find some synergies, but we think this is a really good opportunity for us to continue to expand in these verticals.

Bob Napoli -- William Blair -- Analyst

Thanks, Tom. Thanks, Tim.

Operator

Our next question is from Tim Willi with Wells Fargo. Please proceed with your question.

Tim Willi -- Wells Fargo -- Analyst

Hi, thank you, and good afternoon. I apologize if I missed this at the very beginning of the call. I dialed in a bit late, but could you talk about the first with the acquisition. I guess the margin profiles obviously, right now already very attractive at its revenue size. I'm just sort of curious versus yourself or others in the marketplace. Is there something inherent about the monetization of the customer base, the way they're just running their back office that gives it such an attractive revenue profile that sort of jumped out, I mean in terms of the revenue and margin dynamics there that look so good at this time that they're at?

John Morris -- Co-Founder & Chief Executive Officer

Similar our verticals this is just relatively under penetrated from our electronic payment perspective and it's also highly integrated with the key software providers. So just like Repay, BillingTree adds a lot of value to their merchants and able to hold margin because of that and we're just have chosen very attractive verticals that like I said moving away from legacy payment methods more to electronic specifically card, not a lot of competition, not heavy competitive environment like maybe a retail transaction would be, and so there's a stronger margins and I think they've done a good job of building relationships with their vendors and putting in place solid contracts with their vendors from a processing cost perspective to keep those gross margins higher than have from the business in a relatively lean way to allow for strong adjusted EBITDA margins. So very similar to the question that was asked earlier about culture, they've kind of built their business in a similar way, we have now both from a processing perspective, OpEx perspective and also from a technology perspective in terms of omni channels focused on these specific verticals in a highly integrated way. So lot of overlap and very positive.

Tim Willi -- Wells Fargo -- Analyst

Yes, great. I appreciate that. And one quick follow-up again part as we touched on it someone your prepared comments, but just any update around the initiatives around the mortgage industry just anything to call out there partnership wise, momentum wise just sort of one that give an update about that end market opportunity?

John Morris -- Co-Founder & Chief Executive Officer

Yes. A lot of momentum there. We've signed very large mortgage servicers recently. We've added a large credit union to do their mortgage payments recently, all of them looking for highly customized processing platform that handles complex exception-based processing. So a lot of momentum there, gaining a lot of momentum with Ellie Mae relationship where the technology piece of that is coming together nicely and we're furthering that technology integration to onboard customers more quickly. We're adding customers of Ellie Mae. So a lot of positive trends within mortgage.

Tim Willi -- Wells Fargo -- Analyst

Great, thank you very much for the time.

Tim Murphy -- Chief Financial Officer

Yes.

Operator

And our next question is from James Faucette with Morgan Stanley. Please proceed with your question.

Priscilla Russo -- Morgan Stanley -- Analyst

Hi. This is Priscilla on for James. Two quick questions from me. The first is just on the payment volume side, is there any seasonality that we should be aware of versus some of the ongoing strength that you called out in the April-May trends that you've been seeing just, we want to make sure we're half during the cadence of what the business should look like and then obviously any incremental debt from the recovery that you're seeing. And then just a quick other follow-up on the payment volume side, could you give us a sense as to what the organic growth has been trending at? Thanks.

Tim Murphy -- Chief Financial Officer

So the seasonality is in Q1, typically within loan repayments we get a lot of additional volume from tax refunds when consumers receive those refunds they often make larger than normal payments on their loans or might even pay off their loans and then that's usually has a seasonal dip in Q2. I wouldn't -- our lenders are more focused on lending and originating they are collecting due to refunds and then we start to see accelerated growth in Q3 and Q4. So that trend is continuing to play out and we would expect that again seasonally Q2 would be down in Q1 for that reason, but then we experienced accelerated growth in Q3 and Q4. So we're seeing that continue. And then from an organic perspective, we had a really strong quarter organic gross profit growth was 11%. So that was very strong for us, and we're excited about that. We had really large volumes from a lot of our larger personal and auto lenders and that was a good signal.

Priscilla Russo -- Morgan Stanley -- Analyst

Thanks.

Operator

Our next question is from Mike Grondahl with Northland Securities. Please proceed with your question.

Mike Grondahl -- Northland Securities -- Analyst

Yes, thanks guys. Did you say the three senior sales people you hired will they be focusing on a specific vertical or more generalist and then did you say how many salespeople you picked up with BillingTree?

John Morris -- Co-Founder & Chief Executive Officer

The new sales hires, one of them specifically will be focused on selling ISOs for our TriSource back-end processing business. And so looking to add additional customers there, like I said, that business has performed very nicely. It's really high margin and we're looking to add customers in this particular sales person has lot of experience there within payments in that part of the payment business. The others will be focused on enterprise level customers and loan repayments looking to add very large customers across the different sub verticals on the loan repayment. So that's where there will be focused. In the BillingTree team is really largely have relied on distribution from software partners. So they haven't had to have a huge direct salesforce, they get a lot of referrals from software partners. We do have a strong sales team that will be very additive to us and then we will be trying to find ways to help further penetrate those ISV relationships just like we do at Repay.

Mike Grondahl -- Northland Securities -- Analyst

Got it. Okay, thanks.

Operator

Our next question is from Tom Blakey with SunTrust. Please proceed with your question.

Tom Blakey -- SunTrust -- Analyst

Hi, guys. Thanks for taking my questions. The first question is on B2B volume. Would it be qualitative or actually -- attach rate of acquiring the kind of total volume opportunity. If you -- and relatedly what you thinking about growth going forward and that's B2B segment. How much is coming from new ERP integrations and what percentage would be coming from a further penetration rate of existing customer base? And then the second question is on BillingTree is very interesting here, a big part of their business, related to AR management. I was wondering how complementary this acquisition is, your existing Billtrust relationship, that'd be helpful? Thank you.

John Morris -- Co-Founder & Chief Executive Officer

In terms of B2B volume, the opportunity is huge. I mean in a B2B AP automation, we estimate our addressable market opportunity of 2.2 trillion in B2B merchant acquiring, it's $1.2 trillion, so about $3.5 trillion of payment volume opportunity in B2B across AP and AR and we think that our customers have probably a higher than average virtual card volume penetration rate. And so we're trying to increase that and take have them send more and more of their payments via virtual card and have the suppliers and able to accept virtual cards, which is a higher margin business for us and say traditional ICH. So that's what we're trying to do is just kind of just go out most of the customer conversations a greenfield and there is not a competitive takeaway. It's just trying to move them away from check to electronic payables and specifically enhanced ACH or virtual card that's on the payable side and on the merchant acquiring side within B2B. Yes, it's going to market through ERPs whether it'd be Sage or Acumatica and trying to tap their customer base to utilize our card payments and accept cards sort of in the business to business transaction and again trying to increase penetration of card acceptance -- B2B merchant acquiring.

In BillingTree, the AR management business there is really more about business process outsourcing and acceptance of payments and it may be on something that's passed to healthcare payment for example and that's just helping their customers get paid more quickly and efficiently. It's not really related to the PPN integration. It's more about a getting acceptance of those third-party maybe late payments in those various sub verticals. Also the revenue cycle management talked about before where our hospital has outsource their billing and collections and the hospital is looking for -- to be able to take payments via card from their patients, that revenue cycle management is also part of it.

Tom Blakey -- SunTrust -- Analyst

Thank you very much.

Operator

And our next question is from Bob Napoli with William Blair. Please proceed with your question.

Bob Napoli -- William Blair -- Analyst

Thank you for the follow-up. Just on BillingTree that looks like the net take rate is a little bit higher than it is for RAPY brings the blended rate up close to 110 basis points. Does that sound right? It's 108 basis points, something like that?

John Morris -- Co-Founder & Chief Executive Officer

That sounds right, yes. Yes, they do have a higher take rate, yes.

Bob Napoli -- William Blair -- Analyst

Is that sustainable that and I guess you mean is are you do compete head to head in some regards in some pieces. So that could maybe make it a little bit less competitive in some areas?

John Morris -- Co-Founder & Chief Executive Officer

Yes, I think, it's sustainable. Based on the data we've seen in the conversations we've had with customers and software partners and the salespeople within the organization. We do think it's sustainable. And so that's again, it's a very attractive financial profile, as you're pointing out strong gross profit and adjusted EBITDA margin has a very high take rate and we think that persist going forward.

Bob Napoli -- William Blair -- Analyst

Thanks. And then just a question on -- John.

John Morris -- Co-Founder & Chief Executive Officer

And that's going to be because of the healthcare and because of the energy space and some of the other things that can be a little more credit in that take rate -- credit itself has a higher take rate.

Bob Napoli -- William Blair -- Analyst

Okay, great. Thank you. And then just on the B2B payment business with the four acquisitions you've made, what's working better than others or anything that's really standing out and what is the growth rate of that B2B payments business combined? So what's standing out what's the overall growth?

John Morris -- Co-Founder & Chief Executive Officer

CPS is doing really well there the business that does payables for large hospital systems or education systems, they really are going after an enterprise client and they are really good at that type of sale and we've seen them now win some large customers like we talked about on the call a top 50 US City. We're now doing all of their payables for their public school system. As you can imagine, there will be a lot of vendors there and a lot of payables and we're just seeing a lot of those types of large enterprise wins and they just did a nice job with that. We hope that will continue across the various verticals in that business growing is growing probably 20%, 25% on a combined basis. A big part of it is adding to the supplier network. As you know that's a big piece of the payables business and not only adding suppliers, but enabling them to accept virtual cards both cPayPlus and CPS did a great job of virtual card enablement. So that's why we think we have higher than average virtual card acceptance rates in these particular sub verticals as a supplier enablement is very strong.

Bob Napoli -- William Blair -- Analyst

Thank you. Do you actually use the VPN at this point, are you still working on integrating?

John Morris -- Co-Founder & Chief Executive Officer

The technology integration is close to complete, but we've identified some customers within sub verticals, particularly field services that we think will benefit from that really near future here -- near-term.

Bob Napoli -- William Blair -- Analyst

And is that going to the VPN does that materially move to virtual card acceptance rate, is that the benefit?

John Morris -- Co-Founder & Chief Executive Officer

It said, yes, kind of access to the supplier directory to understand who will take party accept cards and what their rates are and that's part of the value proposition there.

Bob Napoli -- William Blair -- Analyst

Thank you

Operator

[Operator Closing Remarks]

Duration: 53 minutes

Call participants:

John Morris -- Co-Founder & Chief Executive Officer

Tim Murphy -- Chief Financial Officer

Timothy Chiodo -- Credit Suisse -- Analyst

Craig Maurer -- Autonomous Research -- Analyst

Sanjay Sakhrani -- KBW -- Analyst

Andrew Schmidt -- Citigroup -- Analyst

Peter Heckmann -- Davidsona -- Analyst

Robert Arancio -- Barclays -- Analyst

Joseph Vafi -- Canaccord -- Analyst

Bob Napoli -- William Blair -- Analyst

Tim Willi -- Wells Fargo -- Analyst

Priscilla Russo -- Morgan Stanley -- Analyst

Mike Grondahl -- Northland Securities -- Analyst

Tom Blakey -- SunTrust -- Analyst

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