Repay Holdings Corporation (RPAY) Q4 2021 Earnings Call Transcript

Repay Holdings Corporation (RPAY 3.70%)
Q4 2021 Earnings Call
Mar 01, 2022, 5:30 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 those non-GAAP financial measures, as well as 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, sir.

John Morris -- Co-Founder and Chief Executive Officer

Thank you, operator, and good afternoon, everyone. Thank you for joining us today to review our fourth quarter and full year results. During the quarter, we reported card payment volume growth of 43%, total revenue growth of 50%, and gross profit growth of 57%, which included 17% organic growth. This caps off a very successful year for the company.

For the full year 2021, we reported card payment volume growth of 35%, total revenue growth of 41%, and gross profit growth of 44%. Beyond financials, we had many successful business developments in 2021. Early in the year, through a concurrent common stock and convertible notes offering, we were able to secure additional capital for total gross proceeds of approximately 590 million, positioning us well for organic and inorganic opportunities. In 2021, we further expanded our offerings in our key verticals, by putting some of that capital to work through acquisitions.

In June, we acquired BillingTree, our largest acquisition to date, further expanding our position in healthcare, Credit Unions, and accounts receivable management. Also in June, we acquired Kontrol Payables, further expanding our capabilities on the AP side in B2B. And in December, we acquired Payix, which enhances our position in the key auto loan vertical and accelerates expansion in the buy-now-pay-later market. We continue to invest in our integration playbook, which should help us with future M&A.

The integrations from our 2021 acquisitions are going very well. Some of our investment spend in 2021 went toward organic growth opportunities. These investments focused on talent, technology, and product, which paid off with strong organic growth during the year, and positions us well to achieve 20% organic gross profit growth in 2022. As for talent, during the year, we added 265-plus team members, which is an increase of approximately 60% from 2020.

We've increased our sales and distribution resources, focusing both on direct sales as well as further penetrating existing referral relationships with our software partners and adding new ones. For technology, we focus on product development and integrating acquisitions. We hired internally, as well as announced a strategic partnership for Protego Technologies, an Ireland-based consultancy that helps extend technology departments and developer teams with specialized talent and project management. We now have approximately 30 team members dedicated to Repay in Ireland and expect to add additional technology talent through this partnership in 2022.

Some of our investments around product, were enhancements geared toward cross-selling our B2B solutions, which we successfully implemented in 2021. We expect to do more of this in 2022. Additional highlights for 2021 include, further penetrating the Credit Union space, growing our customer base by nearly five times year over year. We now have over 200 Credit Union customers, representing approximately 2.8 million members.

In 2021, we added 98 new software partners, ending the year with 222, compared to 124 at the same point last year, and 53, when we went public in 2019. We also further strengthened our organization from an employee and governance perspective. In 2021, Great Place to Work and Fortune named Repay one of the 2021 Best Workplaces in Financial Services and Insurance. We expanded our board with the appointment of Emnet Rios, who is an accomplished financial services and technology executive, that brings growth experience and blockchain expertise to Repay, as we look to support the evolving needs of our customers and partners.

We also published our inaugural corporate sustainability report, highlighting our ESG efforts. Shifting to our fourth quarter highlights; our business payments vertical, which is focused on the enormous $3.4 trillion TAM, continued to perform well during the quarter. We now have 80-plus B2B software integrations, representing approximately 15 vertical end markets and have over 3,600 clients. On the AP side, we've grown our supplier network to over 110,000.

We saw great success with conversion to our TotalPay solution. An example, one of our hospital clients was averaging close to 20% on virtual card, and we have been able to increase that to almost 40% with TotalPay. We've had similar success in the multifamily and property management space. We also saw strength in the consumer payment side of our business in Q4, and expect the momentum to continue throughout 2022, as the need for loans increases.

Our auto loan business was strong in the quarter, driven by the repayment of loans in the used car market, which is still seeing high demand and increased prices. This is a large and growing market that we are well positioned to continue to penetrate, with the combined efforts of Payix and our existing foothold. On the mortgage origination side of our business, we are experiencing strong demand from originators, seeking first-time payment solutions through our integration with Ellie Mae. On the mortgage servicing side, there are many large players in this space, that continue to use many of our products and solutions.

Our service transfer exchange solution is processing transactions and clients are seeing real value in the efficiencies gained. We expect with rising interest rates and decreased originations, that the velocity of the MSR transactions will increase, generating additional demand for our STX offering. As previously discussed, our acquisition of Payix accelerates our expansion in the buy-now-pay-later space. I want to take a moment to highlight one of Payix's customers.

Scratchpay is a rapidly growing California-based lender in the MedTech space. The company offers its customers various financing options, including an innovative buy-now-pay-later option branded Take 5, for pet expenses. Scratchpay has grown over 600% over the past four years and now services more than 11,000 clinics across the U.S. and Canada.

The Payix software platform has helped the company to continue to scale through its self-service white-labeled omnichannel platform, with approximately 80% of its 2021 payments originating through the Payix Signature mobile application. Scratchpay has been able to drive customer engagement, while keeping defaults and delinquencies low, which has enabled the company to seize market share and generate quality growth. On the personal loan side, we've heard from several of our largest lending customers, that they are going completely digital for both loan funding and accepting payments. When we started speaking with some of these lenders five-plus years ago, they thought it was unheard of to accept debit card for payments.

They would not consider instant funding, because they wanted borrowers to physically walk in branches. Now the consumer is demanding the modern digital experience that our solutions provide. Our instant funding volume ended the year very strong. December volume was roughly 20% above November volume, which is a really good sign for origination activity.

Also, our December 2021 monthly volume for instant funding was 130% above our January 2021 volume. Recently, we announced our partnership with Megasys, a long management software system, specializing in consumer finance industry. We're looking forward to helping them provide the best possible service to consumer and auto lenders across the country, and find solutions that make their business as successful as possible. As I mentioned previously, the integration with BillingTree is going well.

We are on track to realize the synergies previously discussed. On the business development side, we announced a technology integration with C&R Software, a leading provider of collections and recovery solutions to multiple industries. Through the integration, BillingTree's omnichannel payment solution will help organizations in the collections industry accept payments more efficiently. We also recently signed a leading company in the healthcare revenue cycle management space, that provides patient balanced resolution services for hospitals, physician groups.

That positions BillingTree at the intersection of AR management and healthcare. So again, a really strong year, capped off with a very productive quarter. We believe that we are well positioned for another successful year of growth in 2022. As we all know, there are many secular trends toward frictionless digital payments, that have been and will continue to be a tailwind that will drive our business for years to come.

To further take advantage of these trends, we have laid out a few specific initiatives, which will be guiding our investments for the year. We look to further increase our card penetration across all our verticals with top clients. We expect the majority of our growth to be derived from further penetration of our existing client base. We will continue to focus on optimizing our processing infrastructure, in order to reduce costs as we grow volume.

We will look to formally commercialize, market and cross-sell our AR/AP unified capabilities during the year. We have had several recent successes, including signing a large customer away from a competitor, who selected us because of the demo of our AP solution integrated with Acumatica. We're also seeing strong sales from them coming out of the 2022 Acumatica Summit in late January. We'll continue to grow our AP supplier network as well as sign new B2B virtual card clients and expand our virtual card adoption.

We also will continue to focus on developing the best software and payment solutions for all verticals. To support this, we are pleased to welcome technology baron David Guthrie as our new chief technology officer. He brings extensive experience driving technology and product strategies, with a deep understanding of conversion software technologies. David also has a very strong background in integrating the technology of acquired businesses.

As we look to broaden our addressable market and solutions, we will continue to use strategic M&A as an important growth driver for our business. Our M&A pipeline remains very active. Finally, I want to thank the entire Repay team for their hard work in 2021, and welcome all of our new team members. I'm looking forward to keeping up the momentum with all of you in 2022.

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

Tim Murphy -- Chief Financial Officer

Thank you, John. Now let's move on to our Q4 financial results, before I review our financial guidance for 2022. As John mentioned, in the fourth quarter, Repay delivered strong results across all of our key metrics. Card payment volume was 5.6 billion, an increase of 43% over the prior year fourth quarter.

Total revenue was 62.2 million, an increase of 50% over the prior year fourth quarter. This represents a take rate of approximately 110 basis points, mainly reflecting the benefits of increased virtual card adoption, and a strong financial profile of BillingTree. BillingTree, Kontrol, and Payix contributed approximately 14 million of incremental revenue during the quarter. Moving on to expenses in the quarter.

Other costs and services were 15 million, compared to 11.5 million in the fourth quarter of 2020. The incremental other cost and services from BillingTree, Kontrol, and Payix were 1.9 million for Q4. Gross profit was 47.2 million, an increase of 57% over the prior year fourth quarter. As John mentioned, on an organic basis, we saw gross profit growth of 17% compared to the fourth quarter of 2020, as shown on Slide 6 of the Q4 supplement posted to our IR site.

We remain very encouraged by accelerating organic growth. SG&A was 33.4 million, compared to 21.5 million in the fourth quarter of 2020. Fourth quarter adjusted net income was 27 million or $0.28 per share. Lastly, fourth quarter adjusted EBITDA was 27.8 million, an increase of 58% over the prior year fourth quarter.

Fourth quarter adjusted EBITDA as a percentage of total revenue was 45%. We do still anticipate increased investment in sales, technology, and product to continue putting in place the proper infrastructure for accelerated organic growth into 2022 and beyond. We believe that the combination of double-digit organic top line growth, along with best-in-class adjusted EBITDA margins, makes us unique when compared to our peers. Moving forward, we have a high degree of confidence, that our ability to stay well above the rule of 40 is sustainable.

Beginning with the fourth quarter of 2021, we updated our definitions of our non-GAAP financial measures to simplify our presentation, and enhance comparability between periods. Historical reconciliation of net income to both our revised and previous definitions of adjusted EBITDA, adjusted net income and adjusted net income per share, is included in our earnings release. Combined net leverage is approximately 3.6 times pro forma for the Payix acquisition. We expect this to be well below three times by the end of 2022, a very comfortable level, which will allow us to continue to fund organic and inorganic opportunities.

As of December 31st, we had 50 million of cash on the balance sheet and access to 165 million of undrawn revolver capacity, for a total liquidity amount of 215 million. As of December 31, we had approximately 99 million shares outstanding on a fully diluted basis. Finally, moving on to our outlook for 2022. The change in methodology for our non-GAAP financial measures that I mentioned, has no impact on the company's outlook for 2022 in any subsequent periods.

With that said, we expect volume to be between 27 and 28 billion, total revenue to be between 296 and 306 million; gross profit to be between 224 and 232 million and adjusted EBITDA to be between 128 and 134 million. Please note, we currently expect approximately 45% of the P&L contribution to come in the first half of 2022, with Q2 slightly more heavily weighted. The remaining 55% will be in the back half of the year. This contribution estimate is primarily driven by continued growth in our B2B business, which we expect to comprise a greater share of the overall mix by the end of 2022, as well as other fast-growing assets such as Payix.

As a reminder, we expect Payix to contribute approximately 15 million of revenue in full year 2022, with gross and adjusted EBITDA margins of approximately 65% and 40%, respectively. As mentioned, when we announced this transaction in early January, Payix is in very high-growth mode. We would expect each quarter in 2022 to be stronger than the prior quarter for that business. This 2022 outlook assumes organic gross profit growth of approximately 20%.

Please note that Q1 is a tough comp for us, given that there were two rounds of stimulus sent to consumers in Q1 of 2021. We expect organic growth to gradually increase throughout the year, much stronger growth in the second half of the year. We are already off to a strong start in 2022, and look forward to continuing this momentum throughout the remainder of the year. I'll now turn the call back over to the operator to take your questions.

Operator?

Questions & Answers:

Operator

At this time, we'll be conducting a question-and-answer session. [Operator instructions] Our first question is from Ramsey El-Assal with Barclays. Please proceed with your question.

Ramsey El-Assal -- Barclays -- Analyst

Hi. Thank you so much for taking my question this evening. Can you talk about the drivers of organic growth acceleration this year, and kind of what gives you confidence about seeing organic growth kind of accelerate back up to that 20% level of the year, from where we were this quarter?

Tim Murphy -- Chief Financial Officer

Sure. Yeah. So we feel very good about organic growth in Q4. A lot of it has to do with continued strength in auto, recovery of personal loan volumes.

We're seeing really strong signs in the mortgage space, within our Ventanex business, and so that's really helped a lot with organic growth. We do see continued recovery in the personal loan space in the tax refund season. We're seeing positive signs so far in early 2022 around tax refunds. Auto continues to be strong.

We expect mortgage to grow and then B2B will become and has become a much bigger part of the mix, and that's probably the fastest-growing part of our business. So as that grows even stronger throughout 2022, we feel good about the organic gross profit outlook that we mentioned of 20%.

Ramsey El-Assal -- Barclays -- Analyst

OK. And in one of the comments that you made in your prepared remarks, kind of piqued my interest, which was about the majority of growth derived from further penetration of the client base, which I think is something that we probably understood. But could you talk about how revenue visibility in your business has kind of evolved, as it's become a little more complex, a little -- a few more moving parts? Do you have a great deal of revenue visibility now, or is it better or worse than it has been in years past?

Tim Murphy -- Chief Financial Officer

Yes. I mean we've certainly grown and diversified. We have a lot more clients now. But we still think a majority of our growth comes from existing customers, like you mentioned, and we see a lot of visibility there, just with additional adoption of card payments.

We're seeing that now in the B2B AP side as well, as we see virtual card penetration increase with existing customers. And so over time, as we've added software partners, that may have tilted a bit more to new customer acquisition versus existing customer growth. But we still think a majority of it is going to come from existing customers, which provides a high degree of visibility.

John Morris -- Co-Founder and Chief Executive Officer

Yes, Ramsey, this is John well. Good afternoon. We also -- as you understand our businesses well, everything -- all of the new adds we had in closed deals last year, obviously, we get 12 months of that this year. And so that stepped approach is also a contributing factor, as well as things coming out of our implementation pipelines.

Ramsey El-Assal -- Barclays -- Analyst

I see. All right. Well, thank you very much. Appreciate it.

Operator

Thank you. Our next question is from Bob Napoli with William Blair. Please proceed with your question.

Bob Napoli -- William Blair -- Analyst

Thank you, and good afternoon. Nice job. So on the -- I guess a question on the growth of your revenue from virtual cards and cross-border payments. Some of the positive take rates, I think you had mentioned is from growth of virtual cards.

And can you talk about what the penetration rate is on virtual cards? I know you have a partnership with Veem on cross-border. Do you have much cross-border business today, and do you see -- maybe talk about the growth of revenue from those two revenue streams?

Tim Murphy -- Chief Financial Officer

Yes. Sure. So in terms of virtual card penetration, we mentioned on the call, an example of our TotalPay solution, helping us to increase penetration. So in the hospital space, for example, with one large hospital customer, we've seen virtual card penetration go from 20%, up to almost 40% by using our TotalPay solution, where we're getting access to all the payments, the TotalPayment file, and we're able to then monetize virtual cards.

So that's an example of how we think we can have that continue to grow. We're probably about 15% -- 15 to 20% penetrated today. But in that example alone, you could see how it could go up to 40%.

John Morris -- Co-Founder and Chief Executive Officer

Yes, let me add some color. Good evening Bob. We're methodically moving, as we combine some technology platforms in our overall target technology platform, on our B2B side. as we're moving some customers over, we're finding lift inside of those larger customers, as we move to that total paid solution, which is the example that we were giving.

So that gives us great confidence in some of the things we're seeing. We are methodical about it, so we will just switch automatically. And then also on the cross-border side, that is obviously continue -- we'll continue to promote that. But as -- if you recall, predominantly, our existing book of business did not -- was not requesting cross-border.

So that's something that we'll continue to offer on a [Technical Difficulty], and we'll see that picking up traction toward the end of the year, but not immediately out of the gate. We don't -- it's -- some activity there, but it's not significant when it comes to our first -- second quarter numbers.

Bob Napoli -- William Blair -- Analyst

Then just what is the size of the B2B business? And do you expect it to grow above the 20% organic gross margin growth that you've forecasted? And you talked about unified AP and AR, how much potential was unified AP and AR? Thank you.

Tim Murphy -- Chief Financial Officer

Yes. So we mentioned -- I think you can see in our earnings supplement, we ended the year with an annualized volume amount within the [Inaudible] of close to $5 billion, and we expect that to continue to grow. So that business is growing north of 30%. So it's faster than our combined corporate average.

We expect to see that moving more toward about 25% of the total mix by the end of 2022. And so just with that alone, gives us confidence in the full year 20% organic growth outlook.

Bob Napoli -- William Blair -- Analyst

And the unified AP/AR. Thank you.

Tim Murphy -- Chief Financial Officer

Yes, sure. So we talked about -- we invested in that last year with some of our key ERP integrations. We've seen great traction there. We'll continue to roll that out.

We're seeing adoption there. We're seeing the marketplace desiring a one-stop shop. And as we continue to roll that out, both on the AR and the AP side, we're finding more, the AR side wants the AP side, and so that brings our TotalPay solution to the AR side. We expect that to be successful for us this year to continue, what we started in 2021.

Bob Napoli -- William Blair -- Analyst

Thank you.

Operator

Thank you. Our next question is from Andrew Jeffrey with Truist Securities. Please proceed with your question.

Andrew Jeffrey -- Truist Securities -- Analyst

Appreciate you taking the question here. Tim, you mentioned, I think by volume in the slide, you said B2B was about 23% of the overall business. I'm wondering if you look at kind of run rate, all of the nonvertical market debit acquiring businesses, B2B in cross-border and now you have BNPL, but I'm not sure if you're considering that a vertical. Is it materially different than that, and can you just talk about -- I think you mentioned B2B is growing faster at a higher yield and a higher gross margin.

I'm just wondering, how much some of these other nonvertical market businesses can support the growth and the yield for you this year and beyond?

Tim Murphy -- Chief Financial Officer

Yes. So Payix is a good example of that. That's where the BNPL -- a lot of the BNPL business is. We had some ourselves, but they do, and we mentioned Scratchpay on the call as an example, a good customer case study that's grown a lot with them.

And so we think Payix could be growing 40%-plus into 2023, and so that's a good example of the reason we bought that business and how we think it can support accelerated organic growth, once it comes into the organic mix. And then we continue to like owning the back-end RCS platform. That's been great for us, and we're ramping a few customers early this year on that platform. So some of them maybe the more non-traditional businesses you're mentioning, do support growth, and in fact, in the case of Payix are growing faster than the overall business.

John Morris -- Co-Founder and Chief Executive Officer

Yes. Let me add to that, Tim, as our mortgage servicing payment solutions business through our Ventanex acquisition, we see great -- we always have seen, we've seen great opportunities there, as we move throughout this year. Saw some of that obviously in the fourth quarter, definitely seeing that in the first quarter. And we think that will continue to expand, as I said in our press release, the STX exchange, we are starting to see low value proposition, which we've always known about and adoption there.

So lots of opportunity for us to continue to sell many of our solutions in the mortgage servicing space.

Andrew Jeffrey -- Truist Securities -- Analyst

And what do you think the impact is sort of consolidated? Sounds like Payix might blend down the gross margin a little bit. I mean, should we be thinking about changes in mix, which were -- really looked like a nice tailwind in the fourth quarter? Should we be thinking about that changing at all materially, as we go forward?

Tim Murphy -- Chief Financial Officer

Payix has pretty strong margins. We mentioned those on the call. We think over time, we can probably find ways to expand those margins, maybe not in 2022, but beyond, in terms of reducing processing costs, like we have done with some of the other businesses. So if you look at the guidance, it implies similar -- very similar gross profit margins of 75% to 76%, and then adjusted EBITDA margins of 43% to 44%.

So really not a material impact, even as the mix shifts in 2021. And then in the outer years, like we said, we think we can find ways to continue with that margin profile, and even with the accelerated growth.

Andrew Jeffrey -- Truist Securities -- Analyst

Helpful. Thank you.

Operator

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

Andrew Schmidt -- Citi -- Analyst

Hey, John, Tim. Good evening. Thanks for taking my questions. Good to see the acceleration in the organic gross profit growth.

Just a question on sort of consumer health. Could you remind us sort of your exposure from a consumer perspective, where a longer consumer spectrum that is? And then just the impact from change in consumer health or the credit cycle, understanding that some parts of the underlying business are exposed to longer duration loans and some are exposed to shorter duration loans. Just curious, if you could remind us just exposure to cyclicality? Thank you very much.

John Morris -- Co-Founder and Chief Executive Officer

Yes. So obviously, we are -- as you know, we just process the payment. So we can't -- we're not the actual lender itself, but obviously, the things and the feedback we get, is consumer health has been in the best as we've seen it in years. From things we're seeing, we're still seeing positive trends as far as repayment of loans and repayment of various different installment instruments in all the different parts of our verticals that we're seeing that.

We're seeing that leading into the first quarter here as well. We're seeing the tax refund season. We've seen that in the middle to late part of February here continue strong, with some really strong volume days on the loan repayment side of that. So that's usually a really good sign.

People are paying their obligations. And so from the consumer health side that we see, we think that is still robust and strong, at least from people paying their obligations.

Tim Murphy -- Chief Financial Officer

And I would add to that, that we -- like John said, the consumer seems very strong when we're looking at loan repayments and we are keeping an eye on credit metrics and delinquencies with our lenders. And for some reason, those did tick up, our solution actually helps the lenders in terms of getting repaid more quickly and efficiently. So that actually could, in some ways, benefit us. And then on the consumer side, we also have exposure to healthcare, and we don't think that there is -- and that's through our BillingTree business, and we don't think there -- it's a full recovery there.

So there's some pent-up demand in terms of consumer healthcare volume that we think will benefit us, going into the middle or the end of this year as well.

Andrew Schmidt -- Citi -- Analyst

That makes sense. And It's fair to say that the business is -- just given the B2B component and the more diversified nature of the business, it's fair to say that -- I would say that perhaps less cyclical than years past or I should say the sensitivity is -- it's less sensitive to sort of cycle impact? Is that a fair assessment, just given the mix changes in the business over the last couple of years?

John Morris -- Co-Founder and Chief Executive Officer

It could be on the consumer side. But remember as well, we have -- in the loan repayment world because of tax refund season, there is seasonality in the first quarter. And as Tim mentioned in the call as well, there was seasonality last first quarter, because of the two large stimulus payments, which is -- I'm not sure I call it seasonality, but those onetime unusual events that will make first quarter this year a difficult comp for us.

Tim Murphy -- Chief Financial Officer

Yes. I do think you're right, though, over time, as we get more diversified and B2B becomes a bigger part of the mix, there should be less of that.

Andrew Schmidt -- Citi -- Analyst

Got it. Very helpful. And if I could just sneak one more in. Just on the M&A pipe, given you're integrating two acquisitions, your leverage is where it is right now.

What's the right way to think about your likelihood of doing larger acquisitions over the next, let's call it, six to 12 months? Is it going to be -- is the pipeline consisting more of smaller tuck-ins? Are there larger -- are there larger things in the pipeline? Just given where you're at, with deals and leverage currently? Just curious how you think about the pipe? Thanks.

John Morris -- Co-Founder and Chief Executive Officer

Yes, sure. So we have a very active pipeline and we have, as you have followed us for the last few years. But we have a very strategic criteria that we look at that, we decide on what's very strategic to us, in order to make an acquisition. Most likely, we would lean toward tuck-ins in the near term, if that will be the case.

But we -- as you all are aware, we don't get to choose when something is -- comes to market. But we do see great opportunities out there. But as you mentioned as well, we are absorbing a couple of acquisitions that we've made, those are all going well. Payix being the most recent one at the end of December.

And I'll let Tim speak to some of the financial metrics.

Tim Murphy -- Chief Financial Officer

Yes. I mean I think you're right, with leverage where it is today, we'd want to find some additional capacity through adding cash flow and delevering a bit. We did increase the capacity on our revolver, as part of the Payix transaction. So we do have some available there.

And we just have to -- we would have to decide if we wanted to stretch it all beyond, say, four times for something very strategic, but wouldn't likely be much beyond that. So it also depends on the target ahead EBITDA, how much EBITDA and how fast the target was growing, could also provide additional capacity for transactions. But like John said, at this point, it would likely be something on the smaller side.

Andrew Schmidt -- Citi -- Analyst

Makes sense. Thank you, John. Thank you, Tim. I appreciate the comments.

Operator

Thank you. Our next question is from Peter Heckmann with D.A. Davidson. Please proceed with your question.

Peter Heckmann -- D.A. Davidson -- Analyst

Just curious on the growth of new auto loan originations, given some of the inventory constraints for new cars and higher pricing for used cars. Did you see that in the quarter, and if so, when would you expect that to manifest -- in terms of impacts on growth rate, if any, would it be two, three, four quarters out?

Tim Murphy -- Chief Financial Officer

Yes. So, Pete, we're -- as you know, we're much more exposed to the used car space, not nearly as much new. And so that -- we haven't really seen any impact from chip shortages, for example, or inventory supply issues. We continue to see very strong demand in the used car space, even at somewhat elevated prices, and we're not seeing that change.

And because these loans are six or seven years in duration, it would probably take a few quarters for us to feel any sort of change in the macro environment, just because we have such strong repayment volume and long repayment volume with the existing portfolio. So again, just to reiterate, we're much more focused on the used car space or not feeling the supply chain issues and still seeing strong demand.

Peter Heckmann -- D.A. Davidson -- Analyst

OK. That's great. And then just in terms of BillingTree, it looked like the revenue there, if I'm inferring correctly, it was just a little bit light versus our forecast. Does BillingTree have any seasonality around the fourth quarter?

John Morris -- Co-Founder and Chief Executive Officer

Not truly around the fourth quarter. They actually have some in the first quarter, similar to our loan repayment business, where in the collection or our revenue cycle management space, they may get -- they may have benefits from tax refund season. So we've seen a little bit of a pickup in the first quarter there. But I think the numbers in Q4 came in, right around where we expected.

Operator

Thank you. Our next question is from Joseph Vafi with Canaccord. Please proceed with your question.

Joseph Vafi -- Canaccord Genuity -- Analyst

Hey, guys. Good afternoon. Just -- I know it sounds like most of the growth that you've got in your line of sight for '22, is with existing customers. Just wanted to get an idea of how you're looking at organic software partner adds in '22? And then I have a quick follow-up.

John Morris -- Co-Founder and Chief Executive Officer

Yes. I mean we do -- we are adding more organically each quarter. We've expanded that team, what we call partner relationship management, to not only go and try to further penetrate existing software relationships, but add new ones, to your point, to help with new customer acquisition. And so that number was sort of maybe two to three a quarter, and I'd say that number is probably more like three to five a quarter now, as we've expanded that team.

And also, we're in different verticals. Now that we're in more verticals, there is more software partners to go and develop.

Joseph Vafi -- Canaccord Genuity -- Analyst

Sure. And then could you just remind us again, like, if you looked across your existing base, how penetrated you are, you think, and where you could go with your existing partners? Thanks a lot and great results, guys.

John Morris -- Co-Founder and Chief Executive Officer

Absolutely. It's really tough to estimate that. We don't always have access to the full customer base of the software partner, but I'd say in some situations, we're less than 10% penetrated and on average, maybe somewhere in the teens.

Joseph Vafi -- Canaccord Genuity -- Analyst

All right. Thanks a lot, guys.

Operator

Thank you. Our next question comes from James Faucette with Morgan Stanley. Please proceed with your question.

James Faucette -- Morgan Stanley -- Analyst

In terms of just -- a lot of my key questions have been addressed, so I appreciate that. But I wanted to ask, when you look at your growth and growth forecast, can you give us a sense of how that's being split right now or at least in your outlook between brand new customers and expansion with existing customers?

Tim Murphy -- Chief Financial Officer

Yes. I'd say it's still a majority expansion with existing customers, so probably around two-thirds from existing and the balance from new. So it's still very strong existing customer growth. We're seeing adoption of our various channels.

So customers using not only web and phone payments, but adding IVR and mobile and text, all of those things, we think, facilitate card penetration. And then -- on the virtual card side, as we mentioned earlier, now that we've rolled -- starting to roll out the TotalPay solution, we're seeing increased virtual card adoption within the existing customer base. So that, to us, gives us a lot of visibility, as we mentioned earlier in the call, into next year's outlook -- this year's outlook, excuse me.

James Faucette -- Morgan Stanley -- Analyst

Yes, we're already almost a quarter through. And then as far as the Payix acquisition, we've always been big fans of Payix. I know in the press release that there was some commentary about expanding your ability to address BNPL, and I think you kind of touched on this, but can you talk us through a little bit that mechanism and where that exposure would come from, and what kind of exposure it would be, at least today?

Tim Murphy -- Chief Financial Officer

So, yes. So we talked about Scratchpay on the call, which is a great example of a buy-now-pay-later customer that Payix had and has had for a number of years and they've grown tremendously through using Payix's technology and that's just an example of how the buy-now-pay-later space is not only growing, but relying on payment processors like us and Payix to facilitate the processing of these card transactions. And so we see a lot of opportunity there. There is a couple of other case studies like that within Payix existing customers and then they have some in their pipeline, and we at Repay had names in that space, prior to buying Payix as well.

And so again, they do need us to process their card transactions, and they're-- a lot of them are growing rapidly, as evidenced by the Scratchpay example, and that's great for us.

John Morris -- Co-Founder and Chief Executive Officer

So, James, this is John. Good evening. So I'd just add some color to that. Obviously you have retail sales basically turning into retail installment sales and we historically, unless it was an auto that was turning into a loan, in some respects we were probably not touching many of those transactions, and now those are turning into some type of installment repayment obligation, and that will still need a processor into the financial system and power systems and financial technology fits well, and so some of the key integrations that are out there, that drive some of that ERP tracking of the workflows and repayments of that.

So that fits well for us. We also think that as that world leans a little bit more toward the collection side of that, that will -- all of our channels and the way we offer, have additional offerings there to, with the helping get things repaid, we think that will fit well into our overall ability to service that industry.

James Faucette -- Morgan Stanley -- Analyst

I really appreciate that. Thank you very much, gentlemen.

Operator

Thank you. Our next question is from Timothy Chiodo with Credit Suisse. Please proceed with your question.

Timothy Chiodo -- Credit Suisse -- Analyst

Great. Thanks. Good afternoon, everybody. Question here.

More of a -- well I guess a mechanical question around the future of the business and how it could evolve. When I think about the personal loan business, and also the buy-now-pay-later business that you've been expanding into, a lot of the focus on digital has been around card-based repayments or debit and there has been a great argument there for debit right. It's a money good transaction due to the card network rules. There's relatively fast settlement, it's a good experience for the user.

It provides choice, the list goes on. But is it possible that over time, you could also look to offer more of an account-to-account based repayment for those personal loans at BNPL? I know that you do do ACH at the moment. But when I'm thinking of something, where you would partner with someone like a Plaid or a Finicity, and then attach to either an RTP or a Fed Now type of rail, that would offer something that is similarly good for your underlying merchant, meaning they still get that money goodness, and you could still earn your similar take rate, but maybe the total cost to that merchant might be lower, because you can remove the debit interchange. Is that something that's in the pipeline? Is that something maybe you are doing in certain circumstances, or is there a strong argument for debit over account to account?

John Morris -- Co-Founder and Chief Executive Officer

Yes, sure. Good evening Timothy, this is John. So yes, if I look out at those -- as you've heard me say before, we want to be a network to the networks that move funds. And we are today and for the key types of payment modalities that actually are used by, predominantly the industry today.

Debit is the one that we track the most, and the one that gives immediate access and guarantee to funds. But as those -- we tend to -- our industry needs us to actually transact. So therefore, we are designed to deliver all of those payment modalities over time. There is -- it is our goal to add those networks.

We have, RTP is something that's on our roadmap to add in the latter part of this year. I will remind everyone, though, that for the most part, the account to account, it's consumer-driven. So it's more of a push payment, at least in today's form, which means it's difficult for that to automatically occur. And so, still the most popular payment today, still is going to be an ACH.

If you look at the greater picture of overall transactional volume in the loan repayment space. So we see debit being very attractive still. We don't see any major disruption there, but we do see our ability to be a one-stop shop for all payment modalities, and we'll continue to add that. That will be a strength of ours, as we continue to move throughout 2022 into 2023.

Timothy Chiodo -- Credit Suisse -- Analyst

Excellent. Thank you, John. Appreciate that context.

Operator

[Operator instructions]. Our next question is a follow-up from Bob Napoli with William Blair. Please proceed with your question.

Bob Napoli -- William Blair -- Analyst

Hi. Thank you. Just wanted to ask if you're doing any investing around the crypto ecosystem, if there are thoughts of how that fits into your business model over the medium to long term?

John Morris -- Co-Founder and Chief Executive Officer

Sure. Good evening Bob. Long term, when I look at overall crypto itself, I think there's going to be a place for it, especially possibly on the B2B side. We -- just this quarter, we continued to expand what's in the digital wallet.

So we'll -- if that becomes more mainstream and people want to be using that, that's something we'll have the ability to open up. I do think three to five years out, from looking at the concept of maybe stable coins and what help people exchange funds digitally, maybe even in a blockchain format, when you think about with invoices, etc., that could be a great opportunity for us to deliver high-quality ability, to totally help them transact between payor and payee on the B2B side for sure. And if that becomes more mainstream on the consumer side, we will obviously have that as an expansion of the digital wallet. But I don't see that being mainstream, specifically in 2022, although it's something that's on our roadmap and as I said, expanding our digital wallet, but also expanding the networks that we serve.

Bob Napoli -- William Blair -- Analyst

Great. Thank you. And just quickly, what is the size of the mortgage business for you today? And is it -- it's not tied at all to originations, it's purely tied to servicing and loan repayments. I mean you seem to be optimistic about that business?

Tim Murphy -- Chief Financial Officer

Yes, we are. It's still a relatively small part of the overall mix, I'd say less than 10%, but it's growing, and we're growing with some very large existing customers that are large mortgage servicers. We've predominantly been on that part of the space, but we are in the origination part of the market now through our Ellie Mae relationship. And so, we're starting to get some traction there, where we're seeing opportunities for first payments and interim servicing, once the mortgage is originated.

And then it's transferred to an ongoing servicer, and we are actually facilitating some transfers through our service transfer exchange now as well. So there, we just -- we have some very large customers there that are continuing to grow with us, and it's a mix of loan mortgage repayments, and then communication solutions, where we're providing either paper-based or electronic communications support to these mortgage servicers or originators, because there's just a lot of notifications required in that space, because it's heavily regulated. And that's a part of our business that's growing as well. And so there's a lot of different facets within mortgage, predominantly on the mortgage servicing side, but now also in originations.

Operator

We have reached the end of the question-and-answer session, and I will now turn the call over to management for closing remarks.

John Morris -- Co-Founder and Chief Executive Officer

Thank you, everyone, for your time today. We were extremely pleased with our 2021 results, And we're very excited about what we're seeing heading into 2022 and our outlook and what we see as far as in our pipelines and what we have in store for us for the 2022 initiatives, and we're looking forward to a fantastic year this year. And thank you for your time today.

Operator

[Operator signoff]

Duration: 51 minutes

Call participants:

John Morris -- Co-Founder and Chief Executive Officer

Tim Murphy -- Chief Financial Officer

Ramsey El-Assal -- Barclays -- Analyst

Bob Napoli -- William Blair -- Analyst

Andrew Jeffrey -- Truist Securities -- Analyst

Andrew Schmidt -- Citi -- Analyst

Peter Heckmann -- D.A. Davidson -- Analyst

Joseph Vafi -- Canaccord Genuity -- Analyst

James Faucette -- Morgan Stanley -- Analyst

Timothy Chiodo -- Credit Suisse -- Analyst

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