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Edited Transcript of PYDS earnings conference call or presentation 27-Mar-19 9:00pm GMT

Q4 2018 Payment Data Systems Inc Earnings Call

San Antonio Apr 3, 2019 (Thomson StreetEvents) -- Edited Transcript of Payment Data Systems Inc earnings conference call or presentation Wednesday, March 27, 2019 at 9:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Louis A. Hoch

Payment Data Systems, Inc. - Co-Founder, Vice-Chairman, President, CEO & COO

* Lowell Thomas Jewell

Payment Data Systems, Inc. - Senior VP & CFO

* Vaden C. Landers

Payment Data Systems, Inc. - Executive VP & Chief Revenue Officer

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Conference Call Participants

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* Brian David Kinstlinger

Alliance Global Partners, Research Division - Head of TMT Research, MD & Senior Technology Analyst

* Michael Keelan Diana

Maxim Group LLC, Research Division - MD

* William Tennent Gibson

Roth Capital Partners, LLC, Research Division - MD & Senior Research Analyst

* Joseph Hassett

Gregory FCA Communications Inc. - SVP of IR

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Presentation

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Operator [1]

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Good day, everyone, and welcome to the Payment Data Systems Full Year and Fourth Quarter 2018 Earnings Results Conference Call. (Operator Instructions) And please note that today's event is being recorded.

And I would now like to turn the conference over to Joe Hassett. Please go ahead.

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Joseph Hassett, Gregory FCA Communications Inc. - SVP of IR [2]

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Thanks, William, and thank you, everyone. Welcome to Payment Data Systems Fourth Quarter and Fiscal Year-End 2018 Financial Results Conference Call. The earnings release, which Payment Data issued earlier this afternoon, is available on the company's Investor Relations website at paymentdata.com/invest under News.

On the call today are Louis Hoch, President and CEO; Vaden Landers, EVP and Chief Revenue Officer; Tom Jewell, Senior Vice President and Chief Financial Officer; and Houston Frost, Senior Vice President of Prepaid Services. Management will provide prepared remarks, and then we will open the call to your questions.

Before we begin, please remember that comments on today's call include forward-looking statements. Forward-looking statements can be identified by the use of such words as estimate, anticipate, expect, believe, intend, may, will, should, seek, approximate or plan or the negative of these words and other similar words and phrases.

Forward-looking statements, by their nature, involve estimates, projections, goals, forecasts and assumptions and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements, including risks related to the realization of the opportunities from the Singular acquisition; management of the company's growth; the loss of key resellers; the relationships with the Automated Clearing House Network, bank sponsors, third-party card processing providers and merchants; the volatility of the stock price; the loss of key personnel; growing competition in electronic commerce market; the security of the company's software, hardware and information; compliance with complex federal, state and local laws and regulations; and other risks detailed in the company's filings with the SEC.

These forward-looking statements speak only as of the date of this conference call and should not be relied upon as predictions of future events. Payment Data expressly disclaims any obligation or undertaking to update or revise any forward-looking statements made today to reflect any change in Payment Data's expectations with regard thereto or any other changes in events, conditions or circumstances on which any such statement is based, except as required by law. Please refer to the company's SEC filings on its Investor Relations website for additional information.

With that, I would now like to turn the call over to Louis. Louis?

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Louis A. Hoch, Payment Data Systems, Inc. - Co-Founder, Vice-Chairman, President, CEO & COO [3]

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Thank you, Joe, and welcome, everyone. Payment Data Systems had a record 2018 and finished the year with a strong fourth quarter. The company reported record revenues of $25 million, driven by organic growth of 12.1%, primarily from strong growth in ACH revenues in addition to 8 months of incremental Singular Payments revenue.

We ended the year strong with organic growth of 20% in the fourth quarter, again, led by strong growth in ACH revenues. Fourth quarter total dollars processed was $891 million and was the highest in the company's history. Total dollars processed for the year was $3.4 billion and was up 19% from 2017.

For the year, ACH processing volumes increased 17%, while returned checks processed increased 24% compared to 2017. We ended the year with strong momentum, as ACH volumes increased sequentially for the sixth consecutive quarter in the fourth quarter. ACH transaction volumes were up 26%, while returned checks were up a very strong 37% in the final 3 months of the year, increases that exceeded the full year growth, an indication of the strong ACH momentum.

We continue to experience growth in our ACH business and we remain an industry leader. Our transaction volumes are increasing both from winning new business and from existing accounts increasing their volumes. For example, we just received the ACH business of an insurance company that was previously using their bank for this service. Compared to the bank's simple ACH products, we offer considerably more functionality and competitive pricing through our robust ACH platform.

According to the governing body for ACH payments, NACHA, ACH payments were up 8.7% in the fourth quarter. While that is the fastest rate of ACH growth in 11 years, our fourth quarter growth rate exceeded this industry rate by more than double. We attribute our ability to outpace the industry through our NACHA certification, expanding bank sponsorships and a portfolio of attractive ACH services. We expect ACH revenue growth to remain in the mid-teens this year, which continues to be the engine providing the resources to fund our growth initiatives.

Our prepaid business also had an outstanding 2018. In addition to adding new customers such as Fancard, UniTeller, OpenTable and many others, we continue to improve the functionality of our platform, focused primarily on enhancing the capabilities of our virtual card. Our ability to deliver a virtual card directly to a smartphone, wallet remains one of the industry's most innovative offerings. We have a -- we have the strategic advantage of having ACH prepaid and card processing capabilities all under one roof.

Finally, our card processing business also had a great year. In 2018, credit card dollars processed were up 110% and transactions processed increased 111%, with both dollars and transactions processing -- processed setting an all-time record.

We continue to make rapid progress, commercializing our PayFac platform, which Vaden will cover shortly in more detail. It's a very sticky business, so we expect to keep adding new accounts on the PayFac platform, where we should see sequential growth in volumes and revenues as we progress through the year.

Overall, 2018 results were driven by the continued development of new innovative technology, which we have implemented across various payment markets we serve.

We're in the best financial shape in years. We ended the year with over $2.5 million in cash, supplemented by our February $2 million gross financing. Our company is debt-free, and we believe this provides us with the resources needed to continue to invest in our aggressive growth strategies.

With that, I'd like to turn over the call to Tom Jewell, our Senior Vice President and Chief Financial Officer, to discuss the financial results in more detail. Tom?

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Lowell Thomas Jewell, Payment Data Systems, Inc. - Senior VP & CFO [4]

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Thank you, Louis, and welcome, everyone. Let me provide a brief review of our financial results before turning the call over to Vaden. Let me start by concluding that I believe we had a very good year from a financial perspective, which together with our recent financing has us in one of the strongest financial positions we have enjoyed in years.

Over the second half of the year, we were virtually adjusted EBITDA breakeven, which could have easily been positive, except for our conscious decision to maintain our high rate of reinvestment. From where we stand, we will be able to continue to reinvest the strong cash flow generated by our ACH operation back into the business to help accelerate our growth strategies. As Louis stated, we feel very good about the upcoming year.

Turning to the results for 2018. Revenues were up 72% for the year to a record $25 million with full year organic growth of 12%, driven by growth in our highly profitable ACH business. Gross profits were up 40% -- 48% to $5.6 million, with gross margins of 22.3% for the year. Compared to 2017, current year margins reflect the increased proportion of card transaction processing revenues.

General and administrative expenses for the year were $6.2 million or 25% of revenue, which is down appreciably from 30% of revenues last year. This reflects our balanced approach of prudent cost management and funding growth initiatives. The operating loss for the year was $3.8 million versus a loss of $2.8 million in fiscal year 2017. The increased loss was attributable to the additional expenses arising from our investment in growth initiatives as discussed previously.

Adjusted EBITDA for the year was a loss of $0.6 million, little change from 2017. Keep in mind that for the second half of 2018, the adjusted EBITDA loss was under $150,000, which is below the incremental gross spending undertaken during the period.

For the year, the net loss per share was $0.31 based on 12.1 million shares outstanding, down from a net loss per share of $0.33 in the prior year based upon 9 million shares outstanding. At December 31, 2018, the balance sheet was strong with cash and equivalents of $2.7 million, which we subsequently supplemented with $1.8 million in net proceeds from the recent financing.

Let me briefly review the results for the quarter -- for the fourth quarter. Quarterly revenues were $6.3 million, up 13% from a year ago. Fourth quarter organic growth was 20%, driven primarily by strong growth in ACH revenues. Both the fourth quarter this year and last year included 3 months of contribution from the Singular Payments acquisition. Gross profits for the quarter were $1.5 million, up 16% from a year ago and represented 24% of revenues, a nice quarter from a margin perspective, primarily as a result of the strong growth in the highly profitable ACH business.

Total operating expenses were virtually unchanged from a year ago, helping reduce our operating loss for the quarter to $0.9 million, a $200,000 improvement from the same period last year. The net adjusted EBITDA loss for the quarter was $83,000, an improvement of nearly $200,000 last year, a little change on a sequential basis as we continue to reinvest in our prepaid and PayFac platforms.

Bottom line, the net loss for the quarter was $0.9 million or $0.07 per share, an improvement over the net loss of $1.3 million or $0.14 per share for the fourth quarter last year.

In summary, the fourth quarter was a good quarter, enabled us to end the year with positive momentum. ACH is powering ahead with consistent growth. Margins on the incremental ACH volumes are attractive. We are using this cash to strategically invest in our other electronic payments businesses. And as Louis commented, we are beginning to see the innovative new technologies being deployed by our prepaid and PayFac operations as they gain traction.

At this time, I'd like to turn the call over to Vaden. Vaden?

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Vaden C. Landers, Payment Data Systems, Inc. - Executive VP & Chief Revenue Officer [5]

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Thank you, Tom and Louis, and welcome, everyone. Louis and Tom have already provided a comprehensive update on our performance. So I'm going to take a few minutes to offer a deeper dive into the PayFac business, which has been the focus of much of our growth investment. Since joining the Payment Data family in the fall of 2017, our mission has been to quickly integrate Singular Payments and commercially launch its pivotal product, PayFac-In-A-Box.

Through the end of 2018, the PayFac team was heads down, tightening up the technology and mapping the sales and marketing strategy. With the technology hardened and the opportunities for early success identified, we effectively launched the service in the fourth quarter of 2018. The reception has been extremely encouraging.

Today, we have a good pipeline of software companies that are in various stages of engagement, whether negotiating contracts, working on completing integrations, onboarding customers or processing transactions. We estimate that all the merchants using the software of all the ISVs with whom we have signed an agreement today represent potentially $1 billion in annual processing volume. We have seen a fairly steady stream of new ISV engagements, which we have previously announced. Behind these companies, there's a growing list of additional opportunities.

A quick example. In January, we announced that property management software companies, TenantMagic and propVIVO, had signed PayFac-In-A-Box agreements. The property management space is a vertical that is particularly well suited for our technology, and along with health care, utilities and insurance, is an industry we have specifically targeted. Both firms have already completed an integration to our proprietary technology, have boarded hundreds of their software users on to our system, and many have begun to transact business on the platform. This we're focused on ISVs with 500 or more users. The mandated type of agreement we are advocating the ISVs adopt makes both financial and technical sense.

First, ISVs are financially incentivized to transfer as much volume on to PayFac-In-A-Box as possible. And given the technological burden of maintaining multiple payment relationships, this approach also simplifies administration and saves them money. With many varieties of ISV payment integrations available, I'm often asked why an ISV would choose our PayFac-In-A-Box solution.

While it is not uncommon for a software company to have some sort of existing payment integration, they are typically with either a third-party payment gateway provider like an Auth. Net or someone like Stripe and do not provide for the mechanisms required to properly monetize payments on a large scale in the near term. For those who offer more standardized third-party payment gateway options, their downstream customers still have to go through the laborious process of setting up their own merchant account, which could take as much as 4 to 6 weeks. With the PayFac-In-A-Box integration, that process is reduced to a matter of minutes.

Of equal importance, our solution mitigates all the compliance, operating and regulatory complexities inherent with the payments industry, which are troublesome for nontraditional payments industry entrants such as ISVs. So it's an easy decision. ISVs can avoid the regulatory and other pains of traditional ISV processor relationship and obtain all the reporting tools that Stripe or other competitors can't provide. PayFac-In-A-Box is simply an ISV's fastest path to incremental revenue through a profit-sharing partnership with Payment Data.

Furthermore, in contrast to our competitors' generally narrow options, with our strong ACH and prepaid technology, we can offer our clients a more comprehensive solution than a traditional card transaction processor. For instance, we recently introduced a robust money disbursement platform that provides access to our ACH, push to debit card and virtual and physical card issuance capabilities. This allows businesses to disburse funds in a variety of efficient and cost-effective ways all through API calls.

By combining our traditional payment services with our card issuance platform, we now offer payment recipients the ability to choose between the issuance of a prepaid debt Mastercard, real-time deposits to checking accounts, traditional ACH or direct deposit or paper check. As Louis mentioned earlier, this is an example of how we are being innovative in our thinking and capitalizing on the strategic advantage of having ACH, prepaid and card processing capabilities all under one roof.

We continue to enhance our API libraries to include other value-added payment functionality, with the aforementioned integration with our ACH and prepaid technologies being just the latest example.

At this time, we'd like to open up the call to questions. As a reminder, in addition to Tom, Louis and myself, we also have Houston Frost, our Senior Vice President of Corporate and Prepaid Development, on the line to assist in answering your questions. Operator?

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Questions and Answers

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Operator [1]

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(Operator Instructions) Okay, and today's first questioner will be William Gibson with Roth Capital Partners.

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William Tennent Gibson, Roth Capital Partners, LLC, Research Division - MD & Senior Research Analyst [2]

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Just one thing was perplexing me on the presentation. How -- we had revenue growth of 14% in the fourth quarter and organic growth of 20%. What's the difference? Was one of the businesses off?

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Louis A. Hoch, Payment Data Systems, Inc. - Co-Founder, Vice-Chairman, President, CEO & COO [3]

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Yes, you want to say that or -- roughly.

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Vaden C. Landers, Payment Data Systems, Inc. - Executive VP & Chief Revenue Officer [4]

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Yes, the answer was we had a little bit of drop-off in the credit card business that was more seasonal than anything else.

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William Tennent Gibson, Roth Capital Partners, LLC, Research Division - MD & Senior Research Analyst [5]

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Okay. No, that makes sense. Other than that, sure, looks good.

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Operator [6]

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And our next questioner today will be Brian Kinstlinger with Alliance Global Partners.

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Brian David Kinstlinger, Alliance Global Partners, Research Division - Head of TMT Research, MD & Senior Technology Analyst [7]

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Great. Yes, just wanted to first follow up on that question. I'm confused. And being more seasonal, why did that not count as organic? I would only think, the only reason you would have higher organic growth and overall growth would be a divestiture, but I didn't see that here.

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Louis A. Hoch, Payment Data Systems, Inc. - Co-Founder, Vice-Chairman, President, CEO & COO [8]

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So our definition of organic growth excludes the Singular business. So for the whole year, we were separating that out. And that was the factor that contributed to it.

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Brian David Kinstlinger, Alliance Global Partners, Research Division - Head of TMT Research, MD & Senior Technology Analyst [9]

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Okay, all right. You highlighted the $2 million capital raise. I guess I'm curious why the board and management didn't look to take more money and more properly capitalize the company. It seems that it's pretty small, given the capital needs and where your balance sheet is today.

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Louis A. Hoch, Payment Data Systems, Inc. - Co-Founder, Vice-Chairman, President, CEO & COO [10]

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Yes. Well, we're a self-sustaining company. We're able to take care of ourselves. And the only reason we need money is for acquisitions, and we wanted to strengthen the balance sheet that'll allow us to go out there and do acquisitions and just make us stronger. We had the ability to take down a lot more money, and we decided that wasn't the best interest for the company at the time.

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Brian David Kinstlinger, Alliance Global Partners, Research Division - Head of TMT Research, MD & Senior Technology Analyst [11]

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Okay. Well, I don't think $2 million would help you in an acquisition and it certainly would take away the overhang, but that's just my opinion for taking more. But anyways, you mentioned 8% growth in the fourth quarter. For ACH, it was the highest growth rate in 11 years. And I realized you grew faster. But what gives you confidence that the industry will grow fast enough for you to continue to grow mid-teens when it seems like a tough comparison in 2018?

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Louis A. Hoch, Payment Data Systems, Inc. - Co-Founder, Vice-Chairman, President, CEO & COO [12]

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Well, the whole growth in the industry, the 8% encompasses a lot of industries that we're not involved in. We're involved in specialty reoccurring type of payments: utilities, insurance, mortgages, nonbank lenders. And because of that and because of our technology, we're able to grow faster. We're also the only company that has the NACHA certification that works directly with merchants. The other companies that have that certification are payroll providers like ADP or TeleCheck that don't compete against us. So right now, we're the only option that a merchant can go to and that is NACHA certified.

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Vaden C. Landers, Payment Data Systems, Inc. - Executive VP & Chief Revenue Officer [13]

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And Brian, it's Vaden. I'll also add to that. With every integration that we're doing with software partners, we're including and/or pushing ACH as part of those integrations. So they're part of the API libraries, they're very easy to integrate to the enrollment process to set up an ACH account is effectively mirrored with the process of setting up a credit card account. So if you wanted -- if you're a downstream merchant, sub-merchant of one of our ISV clients and you want to use both ACH and card, you don't have to fill out 2 separate applications to do that. You don't have to have 2 separate vendors. You can do it through -- all through a single enrollment process. So we expect that we'll be able to drive some growth in the ACH side of the world through the stuff that's happening on the integrated side of our business as well.

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Brian David Kinstlinger, Alliance Global Partners, Research Division - Head of TMT Research, MD & Senior Technology Analyst [14]

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Got it. Understood. Vaden, you had mentioned $1 billion of processing for companies that are using the PayFac software. Is that give or take what you expect you will process for calendar year 2019?

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Vaden C. Landers, Payment Data Systems, Inc. - Executive VP & Chief Revenue Officer [15]

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No, what that is, is if you take all of the customers that are currently in some phase of working with us and you take all their downstream business and you add all that volume together that's flowing through the respective platforms that we're working with, that's what the total opportunity looks like. So if we batted 1,000, then that would be what you would expect to get. Certainly, we don't look to do that, but that's what's out there today and that's what everybody has their sort of heads down here internally focused on. As I've mentioned to many of you guys who are on the phone as we've talked over the last 15, 18 months since I've been here, the only thing that matters in terms of what we're doing on the PayFac side of the business is how easy we make it to get volume on the system for our customers. And then as we do that and we apply a flat rate percentage against that volume, that's where we drive revenues and earnings. So that's what we're focused on, and certainly, we have high expectations that we'll be able to execute on that strategy.

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Brian David Kinstlinger, Alliance Global Partners, Research Division - Head of TMT Research, MD & Senior Technology Analyst [16]

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So maybe -- because I think, like you said, PayFac is the business that you guys are investing with growth capital, maybe help investors by quantifying your expectations for processing you think for this year or even revenue from PayFac, just so we can understand where you are in this first year and how you expect adoption to play out.

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Vaden C. Landers, Payment Data Systems, Inc. - Executive VP & Chief Revenue Officer [17]

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Well, we don't offer any sort of guidance, but I'll try to give you some sort of perspective. We turned on the first meaningful account in the fourth quarter of last year and really begun to see some traction, which was encouraging. And as we've moved into the first part of this year, we have started to in earnest get through some integrations with some of the larger long-term care providers that we've been working with. And those are scheduled to implement and activate over the next -- course of the next, call it, 60 to 90 days and begin to drop volume on the systems that will be impactful and meaningful and will show up in these numbers that you guys are seeing and that we're going to be talking about in future calls. So our expectations are high, but I can tell you that we're so early in the game that it's really hard to predict what could happen. And my fear is that if we predicted anything, we'd probably predict something far short of what could really be possible.

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Brian David Kinstlinger, Alliance Global Partners, Research Division - Head of TMT Research, MD & Senior Technology Analyst [18]

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Is it possible, Vaden, that 10% of -- I mean you're $25 million roughly in revenue in '18. Is it possible that 10% of your revenue in '19 comes from PayFac? Is that a reasonable assumption? Or would that be getting ahead of yourself?

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Vaden C. Landers, Payment Data Systems, Inc. - Executive VP & Chief Revenue Officer [19]

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You're asking, is it possible that $2.5 million of the revenue in the business could come from PayFac?

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Brian David Kinstlinger, Alliance Global Partners, Research Division - Head of TMT Research, MD & Senior Technology Analyst [20]

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Yes, we have no idea of where you are in the ramp and how fast your adoption -- I'm just trying to wonder -- I'm just wondering out loud some sense of guidance of where this might be, even a longer-term 2- or 3-year outlook.

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Vaden C. Landers, Payment Data Systems, Inc. - Executive VP & Chief Revenue Officer [21]

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Yes, look, I'm jumping out of my chair to want to share data with you. And I think you'll see it. We won't have to speculate over the next 2 quarters. It'll start to show up. But to answer your question directly, is it possible, it's absolutely possible.

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Brian David Kinstlinger, Alliance Global Partners, Research Division - Head of TMT Research, MD & Senior Technology Analyst [22]

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So what you're saying is we should see stronger sequential growth than we've seen in the last 2 quarters as PayFac starts to -- is that right?

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Vaden C. Landers, Payment Data Systems, Inc. - Executive VP & Chief Revenue Officer [23]

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You have. I mean look, the reason for that is because we really -- outside of some customers we boarded in a test environment to harden the system and work through some of the kinks and bugs to really perfect it and make it what we wanted it to be and created so that its scalable, we really didn't board anything of significance until October, November of last year. We boarded in October. The first volume started to flow at the end of the month and into November. So we had a little bit of traction in November. And then we've had a number of other accounts onboard onto the system. If we're talking about numbers of new merchants going onto the system, we've had lots of that. But we don't get paid for merchants on the system, we get paid for volumes on the system. You obviously can't have volume if you don't have merchants. So one is important to the other, but it's not necessarily an indicator of how significant the volume is going to grow, if that makes any sense.

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Brian David Kinstlinger, Alliance Global Partners, Research Division - Head of TMT Research, MD & Senior Technology Analyst [24]

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It does. Last question I have is, in the fourth quarter, you guys grew 14% about. With PayFac starting to build, is it reasonable that organic growth could be that 14% or higher? I mean the core business would keep growing as it is and PayFac grows from 0% obviously to something much more meaningful, is it how we should think about it?

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Vaden C. Landers, Payment Data Systems, Inc. - Executive VP & Chief Revenue Officer [25]

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I guess that's fair.

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Operator [26]

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And our next questioner today will be Michael Diana with the Maxim Group.

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Michael Keelan Diana, Maxim Group LLC, Research Division - MD [27]

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My questions are about PayFac too and Vaden just answered most of them. Just I think last quarter, you mentioned a pipeline of 55 companies. Is that still -- that right, or is that bigger? Or do you have any update on that?

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Vaden C. Landers, Payment Data Systems, Inc. - Executive VP & Chief Revenue Officer [28]

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Yes, Michael, it depends on what you count in that number. And when we talked about that number last quarter, we threw into that bucket everybody that was sort of in an imminent stage of contract negotiations, was either looking at APIs or had started integrating to APIs or was finished with API integrations or was even beginning to process transactions. So yes, that number has grown in terms of the size of the pipeline. And as I mentioned in my remarks, behind those 40 to 60 that fall into those category, there are substantial other opportunities that are rapidly materializing to the point where they're going to be -- they're going to become meaningful to the business. And we talk a lot about the fact that we believe that the primary growth channel for this business is going to be PayFac. And it's -- we're kind of at the stage where the talking part should be coming to an end and the realization part should be getting started. So that's kind of where we're at. We're very excited. We're tempering that excitement for obvious reasons, but we -- our perspective or view hasn't changed on payment facilitation and how we expect that's going to impact our business in the future.

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Operator [29]

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(Operator Instructions) And our next questioner today will be [Ron Nisser], a private investor.

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Unidentified Participant, [30]

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Two questions or actually 3 questions for Louis. Security and speed is king. In the future, can Payment Data Systems handle and process Billserv and Payserv data at petaflop speed?

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Louis A. Hoch, Payment Data Systems, Inc. - Co-Founder, Vice-Chairman, President, CEO & COO [31]

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I tell you the truth, I don't even know what that word is. I can tell you that our systems scale very easily, and we don't have any capacity issues. You said petaflop.

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Unidentified Participant, [32]

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Petaflop speed is mentioned in Summit technology that IBM has been working with. And since security is needed and follow that up with speed and both of them would be king in my opinion. Anyway, second question, the OpenTable cards display Payment Data Systems and FiCentive on the back of the cards. Will Fancards do the same?

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Louis A. Hoch, Payment Data Systems, Inc. - Co-Founder, Vice-Chairman, President, CEO & COO [33]

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Yes, you can go order your Fancard right now. I'm not sure what university you support, but I wouldn't doubt they have almost every major university and have been doing a great job and negotiating direct licensing agreements with those universities. And we're excited about that relationship, and we're excited about the OpenTable relationship.

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Unidentified Participant, [34]

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Well, I support Missouri, the Show-Me State. My third question is could Fancards in the foreseeable future pay for a ride home from Lyft or Uber?

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Louis A. Hoch, Payment Data Systems, Inc. - Co-Founder, Vice-Chairman, President, CEO & COO [35]

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Yes, they can do it now. It's a Mastercard.

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Unidentified Participant, [36]

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I didn't know that. It make sense with the party that goes on sometimes after a game, but they come in real handy once Lyft and Uber IPO. That's the only questions I have. You did a great job of answering them, and I wish everybody the best.

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Operator [37]

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(Operator Instructions) Okay, and this will conclude our question-and-answer session as well as today's conference call. Just want to thank you all for attending today's presentation, and you may now disconnect your lines.