Katapult Holdings, Inc.

Q1 2021 Earnings Conference Call


spk_0: good day ladies and gentlemen a welcome to the catapult first quarter twenty twenty one earnings conference call at this time of participants are a and only mode if anyone should require operators to since peace press star and and zero on your touchdown telephone a question answer session will follow the formal presentation as reminder this conference call it be recorded and when i could turn a conference over to mr bell right vice president this relations say you may begin
spk_1: thank you good morning welcome to the catapult for a quarter twenty twenty one earning top and floor with me today are allowed to via chief executive officer derek madeline chief operating officer and cursor to peter keep on his off if we will be available for que napalm today prepared remarks before we begin our like to remind everyone that this tall will contain forward looking statements regarding future events and phrase performance and should be considered in conjunction with cautionary statements contained in our originally and the company's most recent periodic as you see reports these statements reflect management turn police assumptions and expectations and are suggestion a number of factors that may cause actual results to differ material from those statements except as required by law we undertake no obligation to public the update or revise any of these statements weather as a result of any new information future events or otherwise during a discussion of our financial performance we will provide certain information that constitute non gap financial measures under as you see rules these include measures such as adjusted ebitda and adjusted net income the non japanese financial measures should not be considered replacements for and she lived read together with gap results reconciliation to get measures and certain additional information or also included in today's earnings release which are available in the restoration section our company website at www dot i'd are dot catapult dot com please refer to invest religion section of our website to obtain a copy of of our earnings release which contains descriptions of are not a gap financial measures and reconciliations of non gap measure to the nearest comparable gap missions this tall is being recorded and a webcam will be available for a replay on or us relations website i would now like term the call over to a lando
spk_2: thanks though we're thrilled to be hosting our first cause a public company today is a major milestone in the history of and want to thank the entire catapulting for their hard work and dedication during our journey to become a public company as was or investors old and new have who have supported us throughout the process we're thrilled about catapult unique position to serve a very large become market for durable goods purchased by non prime consumers today we estimate the market to be approximately forty to fifty billion annually little less than one percent penetration as a result we see significant great opportunity for continued long term growth andres call your side discuss our first quarter twenty twenty one results which feature strong revenue growth and solid profitability and also talk about our plans for continued expansion throw year and and beyond but first i'd like to kick off the comedy by providing a brief overview of cannibal the catapult story began in two thousand and twelve with a missing to break down financial barriers we provide disruptive technology that empowers underserved consumers and simplifies the shopping experience to help them secured essential items for their daily lives through our proprietary platform or consumers can shop at the same high quality retailers as prime consumers leveling the playing field market data tells at approximately thirty eight percent of consumers struggled to get the things any like furniture appliances and laptops this lack of access can be due to low credit scores than files or lack of data here's where catapult stepson as a least on for non prime consumers we use proprietary underwrite models to approve customers that others decline while they're shopping online we provide flexible and transparent payment options whereby consumers pair nominal fee attacker followed by a recurring these payments and at the end of the least the consumer owns them owns the item at any time the consumer can lease and return the item or exercise discounted early purchase options the consumer chooses is awesome that best fits their budget and we never charge a late fee ever this clear and transparent experience is how we parted with big name retailers like way their lenovo purple mattress and others our integration with retailers as a kid our success will develop partner says that leading shopping platforms like magenta and shopper by waterfall partners with select i'm headed providers like a farm and have a strong capabilities to customize and integration directly with any proprietary platform our goal is to open the market opportunity for merchants and consumers enabling transactions that would not have happened in a vast not only to our customers love that the a the transparency of the platform but our merchants yes as a strong strategic partner because we bring them incremental shoppers and a massive new addressable consumer base they could not effectively access and and ecommerce world one of our core values is enhanced the lives of our consumers and retail partners by providing transparent innovative and empowering financial products it's also why we're looking at consumers apple at what consumers have to say about us and how are helping them get the things they want and the for example one of our consumers recently told us he had gone for years about sleeping in a bad because she didn't have the ability of border large ticket item she says us i would never have been able to buy a match was outright so whole game in the opportunity to be able to sleep and of that again this is the heart of our mission we enable underserved consumers jim obtain the items that they need another satisfied customer rope i really needed an air conditioner for my upstairs room my budget is decks and i wasn't able to pay full price for important one careful was there for me and i consider my room comfortably and give this review thank you who's the many more just amount of is like this which not only inspires and motivates us but also validates our mission
spk_1: correct or cfl of of i more details on our first core performance and a few minutes but let me give you some first quarter highlights total revenue for que on twenty twenty one was eighty one six nine dollars an increase of eighty eight percent year over year driven by stronger than originations as we continue to add the market relationships and expand
spk_2: and with our existing merchants or just leave it up and que on twenty twenty one was fourteen point seven million one hundred and twenty percent from sixty six point six million and the pew on twenty twenty reflecting the operating leverage inheriting our business model as revenue growth is outpacing are operating expense growth and or net income i was eight point one million and que one ah my hundred and twenty percent year over year in summary or first quarter was strong and what is extraordinary about the business we have done is that we have demonstrated the ability to rapidly grow our top line while the same time the profitable we believe the combination of a high growth and attract the margins is what differentiates couple my vision is at our growth will continue to building more relationships with high quality retailers offering new financial solutions and addition to are currently purchase program and increasing our customer repeat right financial inclusion of the non run consumer drives us and can and the to continue innovating and delivering these listens for this market like many of you we're eager to see the world the pandemic and expect the macro economic environment to be especially dynamic and twenty twenty one as a result will be closely monitoring consumer spending trend damaged in those programs as well as credit conditions for the balance of year we are confident and our strategy to lower value to our business partners and consumers and excited about the growing interest and catapult for about merchants e commerce platforms and prime partners it is important to note that the length it takes for these marches and partners to onboard and ramble impact the timing of originations and remnant so other maybe some variability we know that we've created a solid foundation and business model and anticipate growth will contain catapult focus warm remain squarely on financial inclusion and enabling customers to obtain durable does they need are transparent consumer experience while the same time driving shareholder value with i'll turn it over to derek melon our chief operating officer to discuss our growth strategy there thanks a random as you can see from a financial results we executed well against are key drugs strategies and one of the first quarter we onboard a twenty six emergency good news you know like or i'm simply mac another you commerce retailers are receiving the opportunity to provide expanded payment options from alpine consumers
spk_3: our problems make it easy for merchants to incorporate capital and a check out on another website are pace of an emergencies really excited
spk_2: in addition to new merchants coming on board during the first quarter one twenty one we saw talk to an existing merchant originations gross seventy five percent year over year this growth is built on our technology first collaboration mile
spk_3: this includes things like using our digital assets and data capabilities to attract new consumers who gave existing cattle consumers will deliver award winning service the technology and data center focus typically allowed the growth rate of the catapult least purchase to listen to outpace are merchants general sales growth rate
spk_2: then there can attrition rate of sales on total transaction volume which are merchants love like orlando mentioned earlier we i'm an ico about serving our consumers well we continue to invest in focus our efforts on delivering an incredible experience and don't long term relationships with our consumers as a concrete example of and result of this focus and excited to report that we've improved are not promoter score from the high quality that your and twenty twenty to sixty three as of the in the first quarter
spk_3: the argument metrics to share our consumer oriented approach is a driver to generate additional buying for merchants our existing consumer base continues to grow and our current average least for consumer is one point nine the strong sign that consumers continue to trust us for the online shopping activities the strategy for catapult looking for over the next several years is dirt road will be driven by three key initiatives first give our relationships with existing merchants consumers every year we will that i didn't buy new opportunity to engage a mutual customers and paste hastings store sales by strong multiple auto merchant sites second we will continue adding new merchants economy count fat bombs and expanding our town for us we want to make it as easy as possible for merchants to make catapult available where consumers my shop third we will continue to launch new capabilities and our things that are aimed the optimizing opportunities for all parties at the table
spk_2: will continue to use are dead inside of an avenues of neutral or merchants developed attracted product programs for consumers
spk_3: as part of our merged with then serve the company received fifty million in an incremental capital plan to use the capital to invest in initiatives that will expand our mode accelerate our breath for twenty twenty one we had him or ten million dollars for this investment related to his that not really gonna process of expanding our sales marketing and technology teams with strategic resources and targeted new talent hearts they're also attacking new programs and offers that we believe will accelerate or merchant poultry rate and you create consumer and merchant loyalty these include improving our commercial offerings so that we make an angry would catapult emergence top priority and speed have access to the catapult program also doubling down our life cycle marketing strategies to and and hands or promotions increase consumer loyalty and merchant sense lastly will be investing in technology initiative to expand our competitive advantage and continuously improve consumer marching screens
spk_2: the initiatives include integrations with additional ecommerce bombs and lender waterfalls new product functionality and expansion of our digital consumer experience for example we recently added the salesforce cars clouds or roster of integrations another commerce points out that platform that will provide a great opportunity program
spk_3: now i will handed off the cursor discuss our financials
spk_4: think they're the fight again let me i felt well enough excitement about the teacher had home and my appreciation for every one of the part of the path that woman now turning florida and first quarter total revenue and eighty point six million an increase the eighty percent near here are six forty three point nine million if he wanted to find funny already broken driven by continued strongly him in the firemen and you respect increase in volume as right there is nation otherwise referred to in the industry and dmv are priced merchandise value or sixty three point seven million up from thirty seven point two million and he won twenty twenty starting and twenty twenty one and going forward really recording press origination as a leaders matter and more represent them at the underlying brought our that and that originations are continuously revived over subsequent period to the merchandise return and have greater speed or population of they're recording threats origination is a line consistent with our public peers report i am crackers nations are defined as the retail price the merchandise associated for me purchase agreement and and into during the period for the catapult platform friends origination do not represent running around how are we believe that they use are operating metric of and company and adapters to use and assessing the volume that transaction that take place on our platform writers nation has fifty three point seven million for the quarter or in mind that the case and and fall the traditional retailer the finale and which he wanted to start the the lowest by quarter of the air and he for at the higher driven by holiday shopping great profit was twenty seven point eight million thirty one twenty twenty one and increase seventy eight four percent year over year he wants my my one friend march and at thirty four point four percent decline after ninety days is plain primary due to a slight acceleration and our property help for the depreciation heart we continuously reevaluate needs to current every corner and of salary than finally and he wants money twenty one said town for increase consumer via fran attributed two copies of endless subtle operating expenses for thirteen point three million and he wants money twenty one up fifty one percent compared to eight point eight million and a prior year period a breakout of these expenses are as follows sarah thing ah which represent our call center operations for customer service and collections or one point one million eight he won twenty twenty one of only sixteen percent versus he wants twenty twenty despite revenue and the briefing eighty percent this is a testament or scalability on our business and the ongoing digital transformation of our coughenour and seriously improving how we communicate when and service our consumers underrated these were four hundred and fifty thousand and eight he won twenty twenty one down for of water and that the nine thousand and she wants twenty twenty despite volume being up this is the result of our ability to continue to favorably renegotiate very high car as is gathered them professional had think these are one point five million he wants money twenty one up significantly from you want my twenty primarily due to a transaction costs directly associated with the fence or merger which total six hundred and seventy six thousand dollars for the period as reminder the copter one have an eight year and a not expected to her technology and data analytics expand was one point seven million and he wants y twenty one decreasing six percent every year from one point eight nine and twenty twenty this is due to a greater proportion of software development activities are vying for capital business y twenty one as he continued enhance our product to the ability that that expensive four point nine million for t y twenty twenty one compared to three point four million and she wants y twenty and increase of forty four percent better that americans as the provisions for uncollectible accounts receivable that of recovery this increases primarily driven by the proportional increase in revenue over the period which was off that by the creeps chart operates it up and i'm writing and payment classic perform better expand as the percentage of total revenue to three to six point one percent for he wants y twenty one compared to seven point nine percent in she wants on his money general and administrative expenses three point six million eighty one twenty twenty one come here to one point nine million and he wants money twenty did increase it's related to added had town to support the browser directory of the company general and administrative expenses as percentage of total revenues were flat at four point five percent of a few won twice for anyone and she won twenty twenty he did the company achieving scale interest expense and other fees was four point one million and for he won twenty twenty one of thirty nine percent compared to three million and he won twenty twenty this is partly due to an increased and for any consult out on our dad drinks you want twenty twenty one which is three thought increased origination volume of blood clerking a fifty million dollars her mouth and december twenty twenty interest expense and other feet as percentage of total revenue decrease the five point one percent that a three month and in march thirty first two thousand twenty one compared to seven percentage points money this reduction was primarily driven by the lower interface that we are able to negotiate on her death and sell these in the second half and twenty twenty permission for and compactors was one point eight million and he wants money twenty compared to spend a night out and and he won twenty twenty the increase was primarily due to state of taxes on the company's estimated tackle and company year ending december thirty first twenty twenty one taxable income is expected to be generated certain states where accelerated federal have to preseason and this allow the primary driver a provision of income taxes or he wants twenty twenty one with the state of california where net operating lottery for have been temporarily suspended for companies generating of a thousand dollars a pack for income our gas net income for the first quarter with a point one million and increase that one hundred twenty percent from three point that annoying and first quarter twenty twenty trains are other and i got matter i just either for the first quarter of twenty twenty one was fourteen point seven million representing a hundred and twenty two percent increase over t wants finds funny i just that even a margin with eighty points you percent increase in two hundred eighty basis points compared to fifty point four percent and the first quarter twenty twenty i just didn't even read the fine as net income for interest expense and compacted fan depreciation and amortization expand that based compensation expand changes and warrant liability dilation one time transaction coffin that's really the matter how provision last benefit for pair men and and pull a recruiting off i just that a comfort she wants twenty twenty one with nine point three million up from three point eight million in the first quarter twenty twenty i just the net income is defined as net income the forces that the competition fan changes and warrant by believe i wish and one time transaction cotton about related matter car and a boy recruiting ha maybe it around shoot and liquidity and march thirty first twenty twenty one we had sixty seven point eight million and available has been positive that has provided by operating on activities at seven point three million or total that standing that a dead issue and cough and warren with the hundred and five point nine nine or cash balance and cute suits y twenty one will be increased by an inkwell fifty million passengers and as part of the sensor merger freeing our current cast ballots approximately one hundred million which enhances our financial flexibility capital structure looking ahead with you to resolve or we don't let apparently issue horley guidance on a regular basis of the public company we do anticipate they'll be some noise in the numbers of result of the fence or transaction and we just completed and off with the uni period that we're hoping to from last year that's the want to give you some color on how he will be the second quarter shaping up first and relates to the transaction the completion the merger last week triggered the passing of stock options are as used for transaction later bonuses for boy that will be recognized the kids you in general and administrative expand and total we're at meeting a one time charge a twelve million hour and half dot net income for the outer banks were not that metrics or i've adjusted net income and adjusted he and relations were business keep the i used to twenty twenty with a very unique period a year ago the nation for the most part with understand him orders many brick and mortar retail stores were close in the government providing assistance via the cares that stimulus check the combination these unique circumstances and twenty twenty lead with search online transactions or margin and ultimately our groceries nation as results you to twenty five result in the highest groceries nation quarter for last year and did not follow that the to saw retailers is now the that we typically see and twenty twenty one we anticipate a more normalize rico pounder when it comes to volume and as a result we are expecting lower for as origination your we're for you to twenty twenty one also due to twenty twenty one we started boy and that the capital marketing sales and technology it was reduced the jacket even as you to twenty twenty one as previously communicated and or in april analysts a presentation the first introduced a items for twenty twenty one it before this year given the data we have today we continue to believe that it's guidance is reasonable inappropriate and we plan to write a more detailed update in or to to earnings release to reiterate the guidance is to achieve originations the freighter seventy five to four twenty five million revenue a quarter twenty five supporters family by million the just the either that of fifty to sixty million and as he said previously reaches the beta majority of our growth because trade in the second half of year with a heavy waiting to keyboard on on the way
spk_2: one thank you very much as half the battle orlando for final comment that screws up to wrap up i'll reiterate what i said at the beginning of his goal the some volatility this year is unavoidable as the world against it as as into a post pandemic new normal all focus on a much bigger future convinced that are market leading position or strategic investments and our long term focus will apply to continue strong road and improving profitability for many years to come
spk_0: derrick rose and i would be have to take your questions operator please go ahead as reminder to ask questions you have to press star one i your telephone and to a dried question press pound key please them by we compile the can a roster
spk_2: or first question comes line of then thin k pick from stevens libyan thanks for taking my questioning the morning guys
spk_5: more your first question how your morning i just on
spk_6: if the of of follow up on the commentary for second quarter so first quarter great result and it seems a bit strong for the majority of the least on players and of with that strength i guess that was really sensitive get help of government stimulus tax refunds and so forth and some wondering which
spk_5: thinking about the rest are twenty twenty does the expiration of those stimulus next week once and so on
spk_7: have an effect on
spk_2: your model or how you that the advice they should i as a nice to see or talk you're gonna guess been a little the way we don't think that the stimulus changes are gonna affect on our year your the consumers obviously really strong right now and they they have been pretty resilient of the ethics of the government stimulus as well as yeah obviously or unemployment stopping it and were going back to work so you know will we don't think there's going to be any effect than in as remember we're we're we're during during a recessionary times we actually performed pretty well and with near with with spina obviously happen that would we don't really think this and have any impact but we're going to monitor thing for the rest the or and see how things play out okay great thank you a second question so he highlighted your various partnerships and as wanting to talk about how should think about lifted you're rich nations from your partnerships you at the you i love it much and then shopper fine for himself like for example if we take your shots apple pie does over hundred billion of merchandise volume annually from i think entre is on track to do it going this year i would you think about kind of what your partners are doing how much how should we think about how much of that could quote like if he could seismic good opportunity for apple our lives in this is derek out of think that question so so generally we don't expect to get the grand your level detail in terms of merchant base or or project and by by former partner however we are continuing developer shagging blood for and collaboration with various partners or see really strong numbers the waterfall solution combined with are direct offerings and partnerships is really resonated with online retailing on the whole i out alters our that in a partner like a farm magenta and others and were just getting started and it's really exciting to see the volume in the interest of the as the word gets out the capital to their want you to add and us the just really optimistic will be continuing to get more labor as to what that means for asked but but you're also going to is adding new partners in the end of in the future the attic of i could add that's it i would say we're discussing the surface
spk_0: great figure out the i can keep thinking accepted
spk_8: and for next question can fly in the ramsey aerosol from barclays will begin
spk_3: hi thanks for taking the question is morning
spk_5: i wanted to ask you to give us a little more color on the drivers of that of the at of the full year origination guy with ethic is coming and around one hundred percent growth is that the commit point one cures nations i think we seventy one percent i think comps get a little bit easier for not mistaken the back half of the you also line of sight and emergence onboard and were murky sign
spk_4: last your annual i think just trying to get a little more color the on the acceleration they're hot vs that the result was quarter share her in the to suppress that a year and terms in terms as at the graduate any other than the head year we are pretty stronger than he whined qt early as i mentioned that on the car were gonna into the pit year by year decline and relationship because last year's kitty with unseasonably high for us up and can have the company the or enough where our growth is really are concentrated i still agree on one march and now and three and and as first half of the year in a we meet the paid the new the new merchants driving volume next year now and next and second half years and and ourselves feed them with all very flat holiday season last year which was deathly and that ordinary for us
spk_9: that works were really excited about the hard it is returning and as we on emerge merchants and and see that he's not check that we normally do that for were scenic the route
spk_8: okay
spk_3: and then separately
spk_2: are you seeing any impact on on sales from some of the delayed shipping delayed logistics times have we been reading about and some others experiencing on we try to buy a couch network for years that impacting your business at all iran's it was a dark of think that one so the answer is yes we definitely have seen some ah some delays that as an impact impacting the customer experience and and the into higher inflation rates are abandoned meant that said we do believe that know our approach sixteen communications discuss
spk_3: mars and partner and well with our retailers
spk_10: we don't we all the retain that consumer relationship and possibly get that that transaction later once when things are more widely available so we have seen some fluctuations lives on we continue to monitor and looks like things have enough
spk_2: at last one for me as i just wanted to ask for an update on on the way fair concentration i think i recall as i recall the expectation for that was for to decline quite a bit and twenty twenty one nine at a world is you know obviously a typical right now i'm just curious about how that's trending is at an expectation still on track yeah yeah we we saw a decline in their first quarter of as far as the concentration in as well we expect that on it and so the a while we continue to grow our along with them well it's really about of the new retailers and the new pipeline that we have coming into the second half of the year
spk_0: or put another some point on that serves at the end of the year we are in the mid seventies of concentration we we've we've dropped down to the mid sixties to the end of the first quarter and other than because of the decrease our and expectations on waivers i that's more just see the growth that we have from the other areas of our business with really excited
spk_11: okay terrific take my questions thanks ramsey thank you an expression can fly and at an age combat from look capital markets you know begun
spk_4: the morning and pay for taking my question i guess two questions first question i'm ah i don't know if you want to give the exact number but maybe mean just sort of direction leave at the or be or change in your arm right off like the were you i guess the you of have a better think about that and ah he would love to spend a little bit more color
spk_11: on that or like i said if not the actual numbers just with the chain are you not directly with the change was the or with year
spk_4: yet when you when you're speaking of right off the that can icon and of why gross profit margin went down fight way
spk_11: on it you know now i'm just talking about like write offs right like somebody please the something from you but then they disappear right and yet the right at all yeah yeah yeah blake to canada to confirm that so from my credit perspective and array of perspective were really see steady state right off add prior to you know the pandemic co that had a we had been very consistent lot of faith and right off for the past the twelve months prior south were at the same levels were not seeing any changes materially one way or the other
spk_12: okay and then the second question you know you get a questioner own about dumb about that you inspire federal stimulus and in effect that checks are probably pretty much spent at this point of but we do have is expanded child tax credit that thumb your the kicks in in july they get them lip balm how your sort of
spk_4: thinking about bad and the context of your for your guidance thank you
spk_13: yeah me too i think that's something that will definitely be monitoring and when the me like that said we do see that will weather at that hit we did see some increase in volume and also in terms that pedro add we out there will be checking the trends are closely monitoring the trend on
spk_0: early by that because that something one am our consumers receive a stimulus after tax refund check and we do see that they go and practically by other least so i think they'll be like a dynamic at play though we'll see how it turns out was wondering i close the drop summer
spk_3: make you
spk_14: thank you and
spk_15: and the next question comes line of kyle joseph from jeffries million
spk_3: a good morning at the edges and dungeon the transaction then and then the on
spk_16: they said yeah could follow up there
spk_2: yeah with that alaska in march how long did it take for ninety days by out activity the planet and a normal eyes after around stimulus given you've seen them three rounds at this point kyle take that so that the the quick answer is is it is roughly a know that ninety nine hundred and by day that we really see things see the now
spk_17: that you a part of our our our approach is that we're always looking to communicate with consumers so that day but
spk_15: i can understand how they get the best deal and after the stimulus moments we've seen a variety of different responses right so so early the stimulus era we did see earth some some increase in early bird is option activity in some of the other ah
spk_3: events that happen for example a later last year we didn't see as much activity it look more like a typical back season so the you know typically stay within three months or south and then ah but but but their behavior consumers have been a little bit dynamic government's not novel
spk_16: got it thank you
spk_15: and then just one followed for me
spk_3: as a think about your your pipeline and of retail partners he obviously you guys have a have a leg up and on the ecommerce that it isn't it longer term would you imagine your business they've and
spk_2: yeah very focused on he combo with about the brick and mortar and also from a vertical perspective talk about you know what potential for a vertical diversification are there a big enough you know white faith in your existing am verticals add that just and pipeline i would be helpful thanks sure i'll take that on it you know what we are in the pipeline we see a number of on the channel retailers on which i think we have natalie the the experience and knowledge is it is better than originally had a bloated towards the a brick and mortar a lot more than a dead ecommerce and then we moved at economists of the last several years your we'll wait we want a player who is doing both because we can date we think we can add value you from a marketing perspective and caption is consumer that is shopping online and minor be visiting the store but maybe wants to the fell in the store so ill but we're talking to retailers now that have that and and we're building a capability i think it is is relatively easy on the a one of our sales latest for example does have that background he ran appeal del teams take on that part is is relatively easy i just depends on the scale of the retailer so we're we're not afraid of it but i think we've got some technology ideas around driving a better experience at the store for the consumer so that consumers and control and then on the vertical side
spk_3: yeah i'll take that as on the vertical guy side kyle it's it's good question you know we we tend to stay really close to those essential items we believe that that the sweet spot on for ali's purchase on acted is such the on those essential items like furniture appliances i'll
spk_18: in l corps electronics and that also have the you certainly access the the growth opportunities that are up and and space but but we're constantly and i have a new opportunity then we'll see more consumer demand paper
spk_0: and some are really interesting will be excited as a sophomore at the gilligan the new guys brought on you'll see you know at an increase in interest in areas like game in hand and other accountability that we're seeing really great performance on our sidebar
spk_2: god very helpful than changing the question such as a
spk_5: and once known as your mind and star one for question style one we are fallen from vincent i can take from stevens mcguigan
spk_2: thanks for taking my a follow up so disturbed i guess a broader question but when you think about your pipeline maybe if he could talk about how the cell cycle typically works when you're when you're talking to a merchant be have you've had tremendous origination growth that looks like it's going to continue because especially with your all my focus but i guess when you engage with a retailer or try to engage with the retailer how does the process that we work with what other you know what are they looking for and what are they sort of the friction points and the ones that on of things we've heard from some of the for some of your competitors so catapult has done really well on the be calm and the online side seems like the other guys are trying to add calm and online the of as was trying to reach parity so maybe mean when when when the read when you're engaging a retailer is the competitive pressure or these searching around for other computers to sort of wondering if you could talk about how to see a cycle and that process works
spk_3: things didn't mince that will let break down that question in your few different areas so saw a competitive side of start their which is just but this market is huge and and really on top so where i'm surprised at all to see competitive interest in state
spk_2: you know we've been developing our solution we continue to enhance our strategic mood ah can consistently you know number one ah to deliver more valued brother retailer and for the consumer and and we're not going to stop doing that we wanted they did we wanted it is to work well on both sides of the and have a really compelling solution so know we we have been that away that were really excited about that that i didn't really affect the continue to be differentiated in terms of how the cell cycle works ah it depends on this is where i think we've we also see a lot of encouraging signs one is on as and decide which is a huge part of our business is that we made it extremely easy for a retailer to say yes and to be able to on worry retelling very very simply way a waterfall solution at the right solution or both we think that's really powerful on it delivers really the most value that retailer can see that last with our it's a team based in our marketing approach
spk_5: look back on a mid sized the large file size be the person is greater only for the privatization and r i t side as you go off the scale you see our retailers that now have caught them solutions him proprietary what heart environments or only channel off us solutions
spk_19: and and really a lot of it is that prioritization what's really exciting now overall and that due to the pandemic and some of the testimonials and and more information we've been able to share retailers are really getting it that this is an untapped market that the nonprofits in our base is is a vi
spk_0: viable unattractive attractive market segment for them and were getting really good signs that that the interest is increasing very quickly
spk_11: have a great that's very helpful thank you they said that our next question will come from line of as a cucumber from look capital markets maybe and
spk_2: i for a lamb and ask a second question i'm so you mentioned your pipeline you have a number of omni channel i'm retailers am i guess my question their in i guess whoever is understood europe's it up you know special sauce or that you only really service
spk_3: ecommerce retailers and obviously there's a lot of sales and merchants support that involved with them thirsting brick and mortar retailers so should we expect that if you're going to be going after on channel retails of it's gonna be a investment fellow be necessary to serve those retells that will bring down your profitability thanks
spk_2: it's an ethernet the gate by question in and out when you are an off day that where we thought that some the new investments that were making the first when he just thought well that more about our city to approach and or mention that in a word that zone mobile and ecommerce first and like like he said you know we focus on no damage our retailers that are are are actively looking to grow their cars and a trace sending and and married ourselves
spk_20: ah and and or already have a really nice and commerce business because you're right that is our number one area just up as for deep strategic advantage is that we can deliver value on
spk_11: an increasingly the interest in trying to make sure that they kept as marketers is there however right ah customers are multi channel they shop in different places and so ah retailer of out that that allen inn store experience you know hey can you do in stores while the answer's yes ah about we wouldn't do it the same way as you've seen in other areas right we're we're definitely warranted said the so using digital means communicate with consumer to make the check out
spk_4: seamless and on and so yes it would we will be making a bad investments that should make that will experience smooth and have a a lighter touched in terms of the financial impact of doing and sore experiences but there will be investment that that we have ita got it and then just one phone call or question science as looking through your on press release and your are countless have adjusted ebitda i see are backing out employee recruiting cough now mean these numbers a pretty small saw not terribly concerned about them but i've just never seen that so i guess what why why would you be adjusting for that i would just think that that would be a
spk_11: cost of doing business particular for a growing company
spk_21: yeah think that it's really nice for just one hand caught that we were isolating for some other uplift kill our become a public company that we don't eat recurring farms normally i'm actually really great average cream talent on around by for some of the is one kind of this and that that they could keep accounting office or a better ash we did and
spk_0: elijah pretty firms because we we wanted to get the best talent out there by yeah for historic i'm going forward that they call out we won't be adding it back on a regular kate and but that's something we to play it isolates i any in and around because you're higher than big role that where you're is incredibly papers thanks for
spk_2: government fence are thanks for the clarification
spk_0: check nevada

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