Michael Praeger: So here’s what I would say is we’re — what I would say, it’s a little bit of apples and oranges. And what I mean by that is, if you remember, one of the core business decisions we made when we launched the AvidPay network is to kind of deem and position the supplier as a core customer, just like the buyer. And what that’s allowed us to do is create a value proposition for the supplier that’s more than just coming to the AvidPay network to receive a payment. They’re coming to gain visibility into their invoices. They’re coming to manage their business rules and the types of payments they want to take under certain circumstances. And then they’re coming to get tools like Invoice Accelerator to better manage their cash flow.
And I think that strategy in the current environment is starting to really differentiate ourselves because it’s not just about coming to receive a payment because when you come and receive a payment, it’s typically then about price because there’s no other value. But when you create a value proposition around it, it’s not about price and it’s about the total value proposition that we’re delivering. And so we remain super encouraged on our ability to engage with suppliers and move them from paper check to various forms of electronic payment over time. And so we think that certainly, that strategy is even being heightened in the current economic environment.
Bryan Keane: Got it. And then just as a follow-up on AppFolio and partnerships like that, how many economics work? Is there a cut that goes to AppFolio — is it lower margin or the same margin? How do we think about the…
Joel Wilhite: Yes. Good question. With all of our kind of core partnerships and not all partnerships are created equal. We have referral partnerships, reseller and then kind of white label type partnerships. But yes, there is compensation that goes to our partner in this case to AppFolio. However, we believe that the kind of the contribution of it is very — is in the same ballpark as our direct sales as a lot of that sales and marketing expense is absorbed by the partner versus AvidXchange. So a very similar kind of net contribution as I look at it.
Operator: Our next question will come from Brent Bracelin with Piper Sandler.
Brent Bracelin: Joel, if you could just talk through visibility into further increasing yield, clearly, yield and float were big factors helping you insulate against a slowing TPV growth rate here? Do you have visibility you could continue to kind of drive improvement in yield, one? And then Mike, if you could just double click in that folio. Is that a white label relationship where they’re going to be promoting this across their installed base? And could there be a quick ramp there or not?
Michael Praeger: Hey Brent, so I’ll take a crack at your first part of your question. So the short answer is yes. And what I would do is just remind you kind of how we think about the overall growth algorithm in the business. Remember that we measure the degree to which we kind of retain and expand the overall transaction volume. And we were — in the last couple of years, we’re in sort of a 104%, 105% overall net organic expansion. That is suppressed somewhat this year, obviously, given the macro environment that we’re in, but continuing to kind of maintain a solid base and still expand to some degree. So that first step is kind of the retention and expansion. Number two, adding buyers and adding the buyers’ volume and then 3 yields.
So you’ve asked about yield. We have seen good yield expansion. We’ve talked about that as the sort of third piece of our overall revenue model. And we’ve talked at our Investor Day about the opportunity we see ahead of us. And so long story short, yes, yield plays an important part in our overall revenue model revenue growth and gross margin and EBITDA expansion as well.
Joel Wilhite: Yes. And a little bit, I’ll add on to the second part of your question regarding AppFolio. Yes, we’re super excited about what that means. As I indicated in my remarks, I think in our 2 to 3 years, is the largest accounting system partnership we’ve ever done in terms of the sizable customer base that’s applicable to our profile. We believe that over 50% of the AppFolio customers fit within our target profile. And typically, we see is that the first 36 months of any new partnership are the most critical as in this case, with our white-label relationships that they will be promoting it to their installed base. And we are working hard with the portfolio team to on that positioning and strategies, taking account all the learnings we’ve had across other strategies or examples that we’ve incorporated over the years such as MRI, RealPage, Rent Manager, ResMed are all examples of similar partnerships.
We can take all those learnings and apply them to that full partnership. So certainly, 36 months will be the most critical in terms of kind of that ramp-up.
Brent Bracelin: Good. Sounds like a big win.
Operator: Next question will come from James Faucette with Morgan Stanley.
James Faucette: It’s Michael Fontan for James. I wanted to ask about volume. Anything to call out in terms of how volume trends may have evolved throughout the quarter. I’m more curious as to how exit rates trended relative to the full quarter volume growth and perhaps what you’re anticipating or embedding into the 4Q guide?
