Shift4 Payments, Inc. (NYSE:FOUR) Q4 2022 Earnings Call Transcript

Shift4 Payments, Inc. (NYSE:FOUR) Q4 2022 Earnings Call Transcript February 28, 2023

Operator: Hello and welcome to the Shift4 Fourth Quarter and Full Year 2020 Earnings Conference Call. My name is Lauren, and I will be coordinating your call today. There will be an opportunity for questions at the end of the presentation. Please note that this call along with the Q&A will be for a duration of 60 minutes. I will now hand you over to your host, Tom McCrohan, Head of Investor Relations to begin. Tom, please go ahead.

Tom McCrohan: Thank you, operator and good morning everyone, and welcome to Shift4’s fourth quarter earnings conference call. With me on the call today are Jared Isaacman, Shift4’s Chief Executive Officer, Taylor Lauber, our President and Chief Strategy Officer; and Nancy Disman, our Chief Financial Officer. This call is being webcast on the Investor Relations section of our website, which can be found at investors.shift4.com. Our quarterly shareholder letter, quarterly financial results, and other materials related to our quarterly results have all been posted to our IR website. Our call and earnings materials today include forward-looking statements. These statements are not guarantees of future performance and our actual results could differ materially as a result of many important factors.

Additional information concerning those factors is available in our most recent reports on Forms 10-K and 10-Q, which you can find on the SEC’s website and the Investor Relations section of our corporate website. For any non-GAAP financial information discussed on this call, the related GAAP measures and reconciliations are available in today’s quarterly shareholder letter. With that, let me turn the call over to Jared. Jared?

Jared Isaacman: Thank you, Tom. Good morning everyone. We are very pleased with the record results we delivered this year in the face of ongoing economic uncertainty. We ended full year 2022 with record levels of volume, gross revenue, gross revenue less network fees, adjusted EBITDA, and adjusted free cash flow all in excess of our midterm outlook. Our 2022 results were predominantly driven through organic initiatives, including the release of new products and well-timed to entry into new verticals. Our high-growth core, which represented the totality of our business at the time of our 2020 IPO was still the primary driver of our growth last year with an ever increasing contribution from our new verticals. Shift4 continues to lift the intersection of payments and commerce enabling software, and we are well on our way to delivering that capability globally.

On that note, this past year included several important company milestones and marked the beginning of our European and international expansion, the successful launch of our next-generation restaurant point-of-sale solution, SkyTab POS, including a pivot towards more direct distribution, and we also cemented our position as the preferred technology provider for sporting arenas, and entertainment venues across the country. Our entire management team is extremely proud of our employees embracing the Shift4 way, which embodies the core principles and beliefs driving our success. As we enter 2023, our team is very excited about the abundance of opportunities we see ahead of us. Our excitement for the future is due to the lens of cautious optimism in light of the uncertain climate we currently operate in.

Industry-wide payment volumes moderated during the December quarter and as such, this informed our internal planning process, including how we constructed our 2023 guidance. That is to say that while we remain confident in our ability to deliver profitable growth well in excess of our peers, the range of potential outcomes is wider this year, as you would expect. Nancy will go into more or more detailed assumptions surrounding our guidance later in the call. Regardless, we will respond accordingly to changes in market conditions and are confident our growth model affords us a higher degree of relative visibility or stability, otherwise unavailable to our peers. For those that have been newer to the story, Shift4 possesses significant competitive advantage given the embedded opportunity that lives within our gateway as well as our software products.

This was best demonstrated in 2020 when we delivered double-digit growth despite the overwhelming majority of our customers comprised of restaurants and hotels that were highly impacted by the pandemic. Our ability to take share and grow has only accelerated since and that confidence remains as we look to the year ahead. So, on to our quarterly performance and results. For the fourth quarter, we generated 55% year-over-year growth in our end-to-end payment volume and 36% year-over-year growth in our gross revenue less network fees, both quarterly records. In fact, we achieved quarterly records across all our KPIs, including gross profit, adjusted EBITDA, and adjusted free cash flow. The cornerstone of our performance remained our high-growth core with an increasing contribution from our new verticals, particularly sports and entertainment, gaming, travel and leisure, and Sexy Tech.

Our gateway conversion strategy continues to be a reliable source of incremental volumes and we continue to renew additional enterprise gateway customers on economic terms comparable to our end-to-end offering as part of our Gateway Sunset initiative. As a reminder, our Gateway Sunset is a multiyear initiative that remains in its early innings and there are new actions on the table for 2023 that are also in the works. The fourth quarter represented the first time we participated in cross-border and European payments. And despite early success, the needle will really begin to move only after the closing of the Finaro acquisition. And Taylor will provide a more detailed update on Finaro including expected contribution and synergies during his prepared remarks.

I will focus the rest of my comments on three areas; to our high-growth core, new verticals, and global expansion. On to high-growth core the foundation of our high-growth core remains the over 500-plus software integration that allows us to go-to-market and service the needs of merchants, especially complex merchants operating in a multi-software environment. We added over 100 new software integrations during 2022 and continue to identify new ways to incentivize our gateway-only customers to convert to our end-to-end offering. As we highlighted in our recent investor event this past November, we officially launched our new restaurant point-of-sale system in September of 2022. We now have over 10,000 SkyTab POS systems deployed and are highly encouraged with our overall sales pipeline.

And keep in mind, we have yet to turn on the marketing engine and continue to enjoy an industry-leading customer acquisition costs. We are pleased to announce the chain of major entertainment venues called Live signed up to install SkyTab POS at restaurants operating across all of their US venues. This includes venues such as Xfinity live near Wells Fargo Arena in Philadelphia, Texas Live located between the Texas Rangers Globe Life Baseball Stadium and the AT&T Stadium, home of the Dallas Cowboys, and the Power and Light District located in Kansas City. We anticipate just live locations contributing hundreds of millions in SkyTab POS payment volume in the year ahead. It also includes sports and social and TVR Cowboys , two of the fastest-growing concepts in the country.

Not only do these entertainment-related venues provide a natural extension of our growing presence in professional sports and entertainment. They also validate the capabilities of our SkyTab POS offering in the marketplace overall. Other notable SkyTab POS wins this quarter include L.A. Music Center and FedEx Field, home of the Washington Commander’s professional football team. SkyTab POS is also making amazing progress with traditional restaurants. Its disruptive price-to-value proposition is resonating as we had expected, and we have a highly motivated and energized direct sales team called Skyforce that has already signed thousands of new restaurants. It’s important to note our success has been without much marketing or promotional efforts.

By offering an unmatched customer experience with leading-edge technology a disruptive price point, SkyTab POS represents a compelling migration path for our existing base of restaurants who are seeking new capabilities and key integrations to better serve their patients. We expect this to represent meaningful cost savings to drive operational efficiencies in the year ahead. Additionally, when serving such a large existing base of customers, we can generate substantial referrals, which also contribute to our low customer acquisition costs and management result, very attractive unit economic model. Moving to our other organic initiatives within high-growth core. We signed numerous hotels and resorts during the quarter, including the Manhattan Clubs, luxury hotel located in New York City; Charleston Harbor Resort outside of Charleston, South Carolina; The Cliffs at Princeville located on North Shore.

I’m also really pleased to announce that we signed a strategic enterprise agreement with a major hospitality operator that we are unable to disclose, but that we expect will contribute billion in additional payment volume in the year ahead. All of these organic initiatives are driving our performance. When viewed on a four-year volume CAGR growth basis, our volumes grew 45% since 2018 compared to low double-digit growth at the two major card networks. Moreover, our average volume per merchant continues to increase and with 200% of pre-pandemic 2019 levels for the most recent quarter. Our quarterly volume growth is 342% of our pre-pandemic levels, along with gross revenue less network fees at 237% and adjusted EBITDA at 456% over the same period.

Our mix continues to shift towards higher end merchants, although it’s important to highlight that spreads within our restaurant and hotel verticals remain very stable. On to new verticals we consider new verticals to consist of all the verticals we entered into post our IPO, including sports entertainment, Sexy Tech, travel, non-profits and gaming, as well as volume contributions from various alternative payment methods or APMs, we currently support as a result of our international expansion. Consistent with our commentary from last quarter, we’re not breaking out volumes or spreads between our new verticals, including our strategic enterprise relationship and our high-growth core due to confidentiality and competitive sensitivity with certain strategic customers.

That stated, and as we expected and previously communicated, we did witness a sequential improvement in our spreads during the fourth quarter as a result of new customer board alongside processing of international and APM volume. It’s worth highlighting, as we continue to expand internationally and partner with international gateway and alternative payment method, like our recently announced PayPal partnership, we may not be directly settling funds for those transactions, the impact of which is that our gross revenue and gross revenue less network fees will essentially be the same. For the quarter, volume contribution across all our new verticals continue to ramp as expected as we benefited from the fall NFL football season, including ticketing sales, the non-profit donation season volume contribution from large strategic customers and contribution from Allegiant Airlines, and we are now processing all of the US ticketing volume.

As mentioned above, we also signed a partnership agreement with PayPal to enable PayPal Checkout including PayPal Pay Later as well as Venmo to our enterprise clients. We will also more prominently promote PayPal as a checkout option to ship for shop merchants and QR Pay customers in return for an expanded revenue share wherever PayPal has selected at checkout. In sports and entertainment, we signed ticketing agreements with premier production and the Space Center in Houston. Last month, we also began processing ticketing for several professional teams, including the New Orleans Saints, New Orleans Pelicans, and Arizona Cardinals. We also signed payment processing and ticketing agreements with the Baltimore Oreos, the Baltimore Raven, the Florida Panthers, Cleveland Cavaliers, and the University of Minnesota.

We will see much more ticketing volume in 2023, now the integration with CPET is complete. And in college sports, we expect to begin processing ticketing for college sports through our integration with in the coming weeks. We will look back on 2022 as the year shift for cementing its position as the preferred payments and technology partner for sports and entertainment venues, including ticketing. Our pipeline remains very healthy in sports and entertainment vertical. In gaming, we signed Casino Resort in Southern California, one of the top 10 largest casinos in California as well as the last Casino, one of the largest casinos in the state of Washington. We also signed a partnership with Passcode Technology, a leading gaming technology provider for cash advance and ATM services where Shift4 is assisting in the development of a cashless gaming experience.

We continue to add state and tribal gaming licenses, including the District of Columbia and added additional states with BetMGM. We anticipate being live in every online state with BetMGM by the end of this first quarter. We are constantly adding critical integration within our online gaming ecosystem and are currently testing multiple B2B integration that combined operate more than a dozen jurisdictions. We are also incorporating Finaro’s European gaming capabilities within our US payment platform. Moving to non-profits. Our non-profit vertical continues to grow and during 2022, we added over 1,000 new non-profits to the platform. The Giving Block has expanded outside of crypto, enhancing their product suite to include stock donations in addition to the ability to accept traditional card-based payments.

The Giving Block has evolved from its position as the leading crypto donation platform to the leading non-cash fundraising platform that supports all forms of digital assets. The Giving Block will continue adding new payment methods and product capabilities as we pursue the $450 billion payment opportunity living with inside the non-profit vertical. In travel, the integration of Allegiant Airlines is now complete, and we are now processing all of Allegiant’s ticketing volume. We signed another US airline during the quarter, which we look forward to disclosing next quarter. With respect to Sexy Tech, we continue to serve an increasingly exciting mix of next-generation e-commerce customers. As you are aware, one very fast-growing customers driving the next evolution of Shift4 and our global expansion strategy.

Additionally, we entered into partnerships with Zipin and Maskin , two next-generation retail concepts that allow customers to check out without having to interact with a cashier. Zipin is already in use in several retail locations in the Dallas-Fort Worth Airport, and Maskin has deployed more than 2,300 locations across the US. Additionally, in the category, we began processing for payments and completed a Bridger Pay integration. All of our success supporting much larger merchants in a variety of new verticals has garnered interest from other large multinational merchants. We are evaluating several exciting RFPs across all our new verticals, which we believe will only accelerate as we expand internationally. On that note, I also would like to provide you with an update on our global expansion progress.

International expansion remains our number one capital allocation priority, both in terms of our M&A pipeline and organic investment initiatives. We expect to receive final regulatory approval on Finaro shortly, and our 2023 guidance does not include any contribution from Finaro. We will update our guidance accordingly following the deal closing. In the interim, we are integrating our payment platform partnership and continue to refer merchants to each other. As you recall, we announced last quarter that we acquired a highly capable European payment service provider, or PSP, that now affords us strike like integration capabilities to offer our European and US merchant. These capabilities include the ability to optimize conversion and authorization rates, sophisticated fraud protection, and best-in-class recurring billing and payment technology.

We now offer these capabilities in over 40 countries. We are also expanding organically into Canada and the Caribbean and in partnership with Finaro, we’re already expanding into Eastern Europe. In the year ahead, I firmly believe we will begin processing payments across Europe for many hotels, restaurants and stadiums. Before handing the call over to Taylor, I want to provide a few more comments on 2022 and how we’re thinking about 2023. In the beginning of 2022, we were one of the first payment companies to express concern about the deteriorating macroeconomic conditions. I commented that this is the type of climate that Shift4 performs tested. Unlike many of our peers that grew up in a zero interest rate environment and a growth at all cost mentality, we self-funded Shift4 through the first 15 years of our editions.

We grew through every economic downturn, including the Great Recession and the challenging pandemic conditions of 2020. Based on past experience, I stated we would reduce spending and focus our resources in 2022 on the true needle movers. As a result, we generated growth rates in line with our midterm outlook in 2022 and expect to continue driving real growth across our core and new verticals. We are accomplishing this while expanding internationally and expanding our margins and free cash flow. As we look ahead to 2023, we have assembled guidance that we feel confident we were able to deliver upon and assuming consumer spending remains reasonably stable, we are poised to deliver another year of similar performance. Nancy will go into this in just a minute, but I want to speak a bit about expenses.

I’ve expressed a very strong position that the leadership team has Shift4 that we will meet our growth targets this year while striving to keep expenses and headcount as flat as possible exiting Q4. I fully expect we will be upgrading talent throughout the year as competitors we admire continue to shed personnel, but I will resist to the greatest extent possible increasing spending. I believe this is a responsible way to navigate the year ahead and will demonstrate the scalability of the Shift4 platform. Last, Shift4 is a strong record of unlocking value through accretive M&A. Our balance sheet remains strong, and we are reducing leverage now at an accelerated pace. Our adjusted net leverage on a trailing 12-month basis is now 2.7 times, giving us ample capacity to pursue other strategic priorities.

And with that, I’ll turn the call over to our President and Chief Strategy Officer, Taylor Lauber. Taylor?

Taylor Lauber: Thanks Jared, and good morning everyone. I’d like to provide a bit more detail on some of the more interesting trends we saw in the fourth quarter, early views on 2023, and how we are positioning ourselves strategically for the year ahead. As Jared mentioned, we approached 2022 with a deliberate caution given what we viewed as the potential for a slowdown in consumer spending in the face of rising interest rates and broader economic customers. While we believe that approach would be highly prudent, it has not manifested itself in our processing volumes. Merchants largely exhibited a normal seasonal cadence with restaurants moderating from the summer highs and our sports and entertainment and other new verticals filling the gap nicely.

Hotels performed stronger than usual as travel was not impacted by the large waves of COVID that we had experienced in prior years. As we mentioned during our Q3 call in November, we also began to see some benefit from our international expansion and alternative payment methods during the fourth quarter, which helped contribute to spread expansion versus Q3. Early indications for 2023 are positive. We saw record volume days as travel resumed during President’s Day weekend and suspect that Spring Break and Easter travel will create strong month-over-month growth as it has in prior years. As you may recall, we typically experienced our slowest period during January and early February. While that was true, we have benefited from some easier comps when considering the impact of Omicron in January of last year.

We are sometimes compared to payment companies operating in a single industry vertical and I think our performance in Q4 highlights the advantages that our vertical expansion strategy has created. We have large and fast-growing franchises in restaurants, hotels, sports and entertainment, gaming, non-profit, travel, and core Sexy Tech, all of which serve to bolster our performance when a single sector experiences moderation. Most importantly, we’ve been able to deliver these strong results and expand our margins and free cash flow. As we’ve mentioned before, many of our competitors in the Fintech arena have not been required to operate with a focus on profitability and positive cash flow. Shift4 approached our growth with a very disciplined and consistent process, constantly balancing a desire for growth with a realistic payback assumption.

This means that we generally deploy capital with an expectation for positive returns within 12 to 18 months or less. As investors justify we put demands higher demand for results in free cash flow, we believe that many of our competitors will be forced to dramatically change their behavior. As Jared mentioned, this type of an operating environment is typically where Shift4 drives, and we are leaning into the current environment, which positions us well to continue to grow and take share, as well as to continue to operate in the same fiscally responsible manner that we have since our founding 24 years ago. To that point, stock-based compensation and the dilutive effects on shareholder returns has been a significant focus in the investment community of late.

Since long before our IPO, we’ve been prudent in balancing the benefits of broad-based employee equity ownership with the dilution it causes to existing shareholders. We have had average dilution of about 1% a year for 2021 and 2022, and this includes the impact of equity used for acquisitions. Our adjusted EBITDA grew by nearly 75% during that same timeframe. A strong early mover understanding of integrated payments alongside of M&A has been a significant driver of our ability to rapidly gain share in numerous verticals and geographies. And the current climate and our balance sheet positions us well to continue to execute in that regard. We do not have any M&A transactions during the fourth quarter and have not included the impact of potential M&A in our guidance, but do expect it will present upside opportunities in the quarters ahead.

On that note, we are nearing what we believe to be the final stages of regulatory review for our acquisition of Finaro. Bear in mind, these regulatory approvals can typically take up to 18 months. And while the timing is by its nature, uncertain, we believe a closing during Q2 is likely. You will recall that we announced — when we announced the transaction, we estimated a full year contribution to volume and adjusted EBITDA of $15 billion and $30 million, respectively. We will continue to update you on the closing progress and pro forma economic contribution as we progress towards closing. Before turning the call over to Nancy, I’d like to sing her praises for just a moment. During a short time as CFO, she has made meaningful contributions to help enhance our operating performance, free cash flow, and forecasting abilities.

Her approach to expense discipline is also particularly helpful as we strive to maintain both best-in-class growth and our very strong margins. Nancy?

Nancy Disman: Thanks so much, Taylor and good morning everyone. In the fourth quarter, we delivered record results and ended the year exceeding the top end of our previously provided guidance ranges for volume, gross revenue less network fees, and adjusted EBITDA, and we also meaningfully exceeded our adjusted free cash flow guidance. Total Q4 volume of $20.7 billion grew 55% compared to the same period last year. Q4 gross revenues were $537.7 million, up 35% from the same quarter last year, and gross revenue less network fees were $199.4 million, an increase of 36% over last year. Our adjusted EBITDA for the quarter was $94.4 million and our adjusted EBITDA margins were strong for the quarter at 47%. Our quarterly results were driven by the continued strength of our high-growth core, improved economics earned from our gateway customers, and higher unit economics resulting from our decision to insource a large portion of our go-to-market distribution in connection with the launch of SkyTab in the third quarter, shifting from third-party distribution to direct in major markets.

As expected, we continue to add and ramp very large enterprise merchants, which is resulting in lower blended spreads. The blended spread for the fourth quarter was 71 basis points versus 74 basis points a year ago and 68 basis points last quarter. We anticipate the ongoing mix shift will continue into 2023 and that our blended spread will continue to decline as we successfully move our market. As we mentioned last quarter, we are not further breaking down the components of the blended spread, given disclosure limitations and competitive sensitivities. However, we did see sequential improvement in both our hybrid core and non-hybrid core spreads in Q4 as compared to Q3, driven by volume mix, new board, and international growth. Having an early look at Q1, spreads remained strong and in line with Q4, but will decline modestly due to the impact of the newly signed strategic enterprise agreement with a major hospitality operator that Jared previously mentioned.

We are very pleased with the margin expansion we delivered this year. For the full year 2022, our adjusted EBITDA margins were 39.8%, representing over 800 basis points of expansion compared to full year 2021. We delivered this margin expansion despite ongoing growth-related investments, including international expansion, new vertical expansion and the SkyTab product launch. We are very confident in our ability to deliver further margin expansion in 2023 and are committed to remain disciplined in our cost management while continuing to support and invest in growth. Net income was $38.5 million for the quarter. Net income per share was $0.51 and $0.46 per share on a basic and diluted basis, respectively. Adjusted net income for the quarter was $40.5 million or $0.47 per share on a diluted basis.

Adjusted free cash flow in the quarter was $56.7 million, bringing full year total adjusted free cash flow to $147.2 million adjusted free cash flow conversion was 60% for the quarter and 51% for the full year. A complete reconciliation of adjusted free cash flow is available in the appendix of our earnings materials. In reviewing these materials, you will see that as of year-end, we settled the outstanding receivable we had with our sponsor bank. We did not include the benefit of the settlement cash inflow and our adjusted free cash flow balances. We are exiting the quarter with just over $776 million of cash, $1.8 billion of debt, and $100 million undrawn on our credit facility. Our net leverage at year-end was 3.5 times and approximately 2.7 times, as Jared mentioned, when adjusted for the contribution of recent initiatives based on the trailing four quarters of adjusted EBITDA.

Our strong balance sheet and free cash flow profile will continue to allow us to invest in the business and our strategic growth priorities, while we remain disciplined in our capital allocation approach. For the full year of 2023, we are introducing guidance ranges for each of our key performance indicators. Our guidance range attempts to account for a variety of business and economic scenarios. As demonstrated last year, the onboarding of multibillion-dollar enterprise merchants and have significant weighting on volume in a particular quarter and it’s difficult to predict. Additionally, the persistent uncertainty of the macroeconomic climate compels us to be cautious. The low end of our guide contemplates modest headwinds in consumer spending during which, we are confident we can deliver best-in-class growth among our peer set.

The high end of our guide invites a continuation of recent trends in both our growth and consumer spending. As Taylor mentioned, Finaro is not included in either scenario and we will be adjusting our guidance on the closing date becomes certain. Regardless, both the high and low end of our ranges represent strong profitable growth, including margin expansion and improved free cash flow conversion. For 2023, we expect to deliver total end-to-end volumes of $100 billion to $109 billion, representing 40% to 52% year-over-year growth. Gross revenues of $2.5 billion to $2.7 billion, representing 25% to 35% year-over-year growth; gross revenue less network fees of $915 million to $955 million, representing 26% to 31% year-over-year growth; and adjusted EBITDA of $410 million to $435 million, representing 42% to 50% year-over-year growth.

We anticipate adjusted EBITDA margins to expand approximately 500 basis points at the midpoint of our guidance ranges and adjusted free cash flow conversion to expand to 52% plus. As a reminder, one more time, this guidance does not include Finaro or any other contemplated M&A in 2023. With that, let me now turn the call back to Jared.

Jared Isaacman: Thank you, Nancy. So, operator, we’re ready to take questions.

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Q&A Session

Operator: Thank you. Our first question comes from Dan Perlin from RBC. Dan, please go ahead.

Dan Perlin: Thanks. Good morning and a lot of good stuff in the results today. I just wanted to ask a question around kind of the embedded expectations within guidance. And Jared, I appreciate the fact you don’t want to give like the vertical number specifically. But I was just wondering kind of directionally, how do we think about how much contributions ultimately are going to be coming from kind of net new business, some of that being vertical, some of that being other opportunities versus just high-growth core and how that may toggle given some of the macro scenarios you’ve built into the year assumptions? Thanks.

Jared Isaacman: Hey Dan, thank you so much and I’m looking around the room just to see if Taylor and Nancy wants to add on. What I would say is that if we were trying to put a 2023 volume bridge in place, it would look very similar — approximately similar to what we did last year, if you just took it on a percentage basis of current volume, how much is coming from the annualized impact of 2022? How much is kind of net new from high-growth core and then the balance being all else, which is predominantly new verticals and to some extent, a very small portion, I’d say, from like international expansion.

Taylor Lauber: Yes, that’s exactly right. So, the one thing to keep in mind is as Jared mentioned, annualizing our Board last year is always the largest contributor inside of the year. We got a half a year on average contribution from those merchants and just getting a full year is a really nice grow the benefit that we get. One thing to keep in mind with a lot of these big merchants did not contribute a full year last year. So, while we surprised, I think investors would the contribution of new verticals kind of serving in Q3 and expanding further you can expect that grow over benefit to help. The one thing I would just sort of maybe caveat Jared’s statement with is we were more pessimistic on same-store sales growth in our guidance this year than we were last year. So, if you recall, we had a portion of our bridge that was same-store sales growth and travel recovery. I think we’re more cautious on that front because I think it’s prudent to be so.

Dan Perlin: Yes. No, that’s great. And then just a quick follow-up. Just any initial commentary around the success you’re having in sourcing strategy. The go-to-market strategy here is a lot more direct distribution than what you’ve had. Obviously, you had a quarter now to kind of see how that’s going. So, I would just love to hear any kind of initial phases there. Thank you.

Jared Isaacman: Yes, sure, Dan. So, we’re really pleased. I mean, I don’t know how many people really follow us on like on any of our digital marketing or social media spend, but we’ve really spent virtually a euro in terms of generating needs for our Skyforce. And the reason is we wanted to spend really the first kind of two quarters just dialing in our operational process. One area of focus is our like literally five days turnaround time from when a new customer is signed to having a fully operational POS system in the restaurants. So, we wanted to really get that dialed in and working very, very well before we kind of turned on the marketing engine. The reason we’ve had so much production is because — and I don’t know how many people picked up on this nuance in last quarter, we spoke about it.