BM Technologies, Inc. (BMTX) on Q2 2021 Results - Earnings Call Transcript
Operator: Ladies and gentlemen, thank you for standing by, and welcome to the BM Technologies Second Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers presentation, there will be a question-and-answer session . I would now like to hand the conference over to your speaker today, Mr. Bob Ramsey. Thank you. Please go ahead, sir.
Bob Ramsey: Thank you, Natalia and good morning, everyone and thank you for joining us for BM Technologies second quarter 2021 earnings webcast. Our earnings release was issued last night and we've posted an investor presentation this morning. Both documents are posted on the investor relations page of our company's Web site at ir.bmtxinc.com. Our investor presentation includes important details that we'll be walking through on this morning's webcast, and I urge everyone to pull up a copy. Before we begin, we would like to remind you that some of the statements we make today may be considered forward-looking. These forward-looking statements are subject to a number of risks and uncertainties that may cause actual performance results to differ materially from what is currently anticipated. Please note that these forward-looking statements speak only as of the date of this presentation and we undertake no obligation to update these forward-looking statements in light of new information or future events, except to the extent required by the applicable securities laws. Please refer to our SEC filings, including our Form 10-K and 10-Q for a more detailed description of the risk factors that may affect our results. Copies may be obtained from the SEC or by visiting the investor relations section of our Web site. At this time, it is my pleasure to turn the call over to our Chief Executive Officer, Luvleen Sidhu. Luvleen, the floor is yours.
Luvleen Sidhu: Thanks Bob. Good morning, everyone. Thank you for joining BM Technologies second ever earnings call. We are excited to be here this morning and are great both for your interest in BMTX. Joining me today on the call is Bob Ramsey, our CFO. Also joining us is our COO, Bob Diegel; and our CTO, Jamie Donahue, who are on the line and available during the Q&A section. So let's get started. I am delighted to report to you record results for the second quarter and first half of 2021. As a reminder, the second and third quarters are seasonally slower for us since a lot of our students are not on campus and receiving refunds. Despite the seasonality, we reported strong results. We are pleased to report Q2 2021 EBITDA of $5.2 million, up 11 time year-over-year, and core Q1 revenues of $22.7 million, a 46% year-over-year increase. Both Bob and I will later provide more details about the financials. But before that, I wanted to share about BM Technologies. Let's start on Slide 3. For those of you joining for the first time, BMTX is one of the largest digital banking platforms in the country today with over 2 million accounts. We are on a mission to make banking better for millions of Americans by providing a more affordable, transparent and consumer friendly banking experience. We were one of the first neo banking fintechs to go public earlier this year, and are one of the first to have a profitable business model. We pursue a B2B2C and banking-as-a-service strategy, which allows us to acquire bank customers at high volumes and at very low cost. Today, we are acquiring customers at less than $10 versus a traditional bank, which is acquiring customers in the $300 to $1,500 range. This provides a tremendous competitive edge for us relative to not only traditional bank but also to most challenger banks, which are having to spend an exorbitant amount to acquire a bank customer. At the same time, we are enabling our partners to offer fully branded financial services products to their customers and to their employees to better attract, engage and retain them. It also provides them with a strong point of differentiation and a relatively commoditized industry and new revenue stream. In essence, we enable them to offer modern fully branded banking services at a fraction of the cost and at a fraction of the time, it would take them to roll this out on their own and all under their own brand. Additionally, our technology can also be used by community banks and credit unions to accelerate their digital strategies with state-of-the-art mobile and web based banking apps. And we can also provide back office banking operations, compliance, fraud and risk management and customer service support if needed. Today, we are leveraging our B2B2C strategy in three main verticals. The first being higher education where we have relationships with approximately 735 campuses across the country, which allows us to touch one in every three college bound students and introduce them to BM Technologies and offer them a choice to open a BankMobile Vibe Checking account through our partner bank. It is through this vertical that we disbursed $10 billion to $12 billion a year, of which approximately $2 billion flow into BankMobile Vibe Checking account. And we are opening several hundred thousand new accounts each year through this channel. Additionally, we continue working towards the launch of a co branded BankMobile Google Plex account, which we expect will result in more students choosing a BankMobile account to receive their returns. The second vertical is our white label banking business, which today is best exemplified by our partnership with T-Mobile and with the launch of our checking account product, T-Mobile MONEY. We continue to expand and significantly grow this relationship. Lastly, our workplace banking vertical where we distribute the BankMobile suite of banking products to employees across the country, as well as financial wellness offerings. We continue to make solid progress in all three of these verticals. As I mentioned, we are a mission driven company, first and foremost, and are dedicated to our vision of making financial services more accessible and affordable and to financially empower millions of Americans. From a financial standpoint, our vision is to create a company with a market cap of $500 million to $1 billion over the next three to five years by executing on the strategy that we've laid out and building upon the strong foundation we already have. Flipping the Slide 4. Like I stated earlier, I am excited to be able to share with you our record Q2 results. Our core EBITDA is up 11 times year-over-year with a Q2 2021 EBITDA of $5.2 million. Our core revenue improved 46% year-over-year with Q2 revenues up $22.7 million. Additionally, we continue to add new accounts to our portfolio and added approximately 200,000 new accounts in the first half of this year. Moving on to Slide 5. Here we graphically show our strong year-over-year growth in revenue and EBITDA. Core revenue for the first half of 2021 totaled $46.8 million, a $15.6 million or 50% increase from the first half of 2020. Core EBITDA through the first half of 2021 totaled $13.8 million, a $15.3 million increase from the first half of 2020. The fact that our core EBITDA growth is so close to our core revenue growth reflects our expense control over the last year. On Slide 6, you can see that our average service deposits totaled $1.6 billion in Q2 2020, a 126% increase compared to Q2 2020. Specifically, average new business service deposits increased 616% compared to Q2 2020, which is $848 million increase. As a reminder, our new business segment includes our white label and workplace banking verticals. In our student business, organic deposits, which as a reminder, these are deposits that are not part of the school disbursement, increased 29% compared to the first half of 2020 to $1.2 billion, indicating strong primary banking behavior. Additionally, debit card spend $828 million in Q2 2021, a 19% increase compared to Q2 2020. In particular, new business debit spend increased 91% compared to Q2 2020. In the higher education vertical, we disbursed $6.4 billion to students in the first half of this year, including over $900 million in BankMobile Vide accounts held at our partner bank. Lastly, we continue to have some tailwinds from federal stimulus with approximately $52 million in stimulus flowing into our accounts during the quarter. Moving to Slide 7. We continue to see strong performance in the overall business. Our revenues per active account increased 41% year-over-year to $45. Again, this is an annualized second quarter revenue number. The strong revenue per count metric is driven by healthy average balances and spend across the portfolio. For example, average deposit balances per active account in our new business segment increased 335% year-over-year from around 1,900 to over 8,000 spend. Average balances and our student active accounts also increased 15% year-over-year with average balances over $1,700 today. Similarly, on the spend side, our new business active accounts quarterly spend increased by 16% to approximately $1,400. On our student business active accounts, quarterly spend is even higher at close to $2,000, a 21% year-over-year increase. Again, we couldn't be more excited about our record financial results. And I will now pass it on to our CFO, Bob Ramsey, for some additional financial updates.
Bob Ramsey: Thank you, Luvleen. I'll start on Slide 7, which shows the growth in our new business, which as a reminder includes everything outside of our legacy higher education business, namely white label and workplace banking. We reported strong growth of 553% and ending service deposits which was over 600% on average and 91% growth in debit card spend. This growth reflected both a 59% increase in the number of accounts, as well as improving per account profitability. As shown on the bottom of this slide, our deposits and spend per account increased by 335% and 16% respectively over the last year. Slide 9 shows for some of the KPIs for our consolidated business, which includes white label and workplace banking. Our debit card spend overall increased 19% from a year ago period and average service deposits increased to 126% second quarter, we reported $22.7 million of core revenues, which was up nearly 50%, $17.5 million in core expenses and revenues less core expenses resulted in $5.2 million in core EBITDA, which is a really strong improvement from EBITDA on a year ago period, which was negative $0.5 million. I'd like to mention that we repaid the $5.4 million in debt outstanding on our line of credit in the second quarter as well. And just today at June 30th, we have no debt outstanding. We're very pleased with our second quarter financial results and are positioned well for the remainder of the year. With that, Luvleen, I'll give it back to you.
Luvleen Sidhu: Thank you, Bob. On Slide 11, I would now like to provide you with a few key business updates. In the higher education vertical, in addition to the positive trend in account level deposits and spend which I have already covered, we continue to see additional positive trends. For example, we added eight new partnerships with colleges and universities across the US in the first half of this year. Over 47,000 additional students now have access to BankMobile disbursements and the BankMobile Vibe Checking accounts. Additionally, we retained almost a 100% of our higher education institutions this year and disbursed $6.4 billion in refunds to students, of which as I mentioned already, over $900 million flowed into BankMobile Vibe accounts held at our partner bank. We also recently announced plans to serve banks and credit unions looking to expand their digital presence, and leverage BMTX's proprietary banking technology stack. With regards to us strategic partnerships this quarter, BMTX also announced a product partnership with Array for credit monitoring and identity protection, which we will be integrating into our white label offerings. We also announced a new workplace banking distribution partner, GoAskJay, a direct-to-consumer insurance and financial marketplace. BMTX’s workplace banking offering will be available to GoAskJay's approximately 3 million users in the US. Lastly, in the new business side in addition to the strong account metrics I have already shared, I would like to share that in Q2 2021 highly active users in the new business portfolio, defined as having both direct deposit and a minimum of five customer driven transactions per month, are spending in excess of $17,000 annually on their debit card and has average deposit balances of over $4,000. This very attractive cohort makes up approximately 16% of active accounts compared to 12% in the second quarter of 2020. We continue to actively work a pipeline of prospective new white label customers, whereby we enable them to offer a suite of financial services products through our proprietary technology stack. We continue to be in discussions with retailers, grocers, fintechs and banks, amongst others, and hope to announce a partnership in the coming months. Next, on Slide 12, we continue to have tremendous growth opportunities in front of us. In our student business, we continued to work on expanding the number of college relationships that we have, which gives us access to more students who we can potentially convert to bank account customers. We are also investing in marketing to drive more conversion and are grateful to have our new Director of Marketing join us from Green Dot and our new Director of Business Development join us from Amex to help us in these areas. With regards to white label, we continue to further expand into new channels and enhance our product offering for T-Mobile MONEY, and continue to work on our pipeline for new partners. Now with our public currency, we are also open to exploring possible strategic M&A opportunities if one plus one can equal three, or more. And lastly, we continue to expand our product offerings so we have the best-in-class digital banking platform. On Slide 13, you will see our five pillars of a full service digital banking platform. The five pillars are banking, lending, advice, investing in insurance and crypto. Our goal is to continue to expand upon our offerings and incorporate each one of these pillars over the next six to 18 months into our white label offerings, providing opportunity for cross sell and to drive even greater customer engagement. In Q2, we did sign a partnership, as I mentioned with Array which I've already talked about, which I believe falls well into the advice bucket. We will be working to integrate this product into our white label offering over the coming months. I would now like to briefly pass it on to Bob to provide some thoughts on our valuations relative to peers.
Bob Ramsey: Thanks Luvleen. So I would start by mentioning to everyone that we have added days to our financial platform via bank comparable group along with and SoFi. The increasing amount of activity in this space with the valuation of some of our peers we think is a good thing. Those companies trade at an easy to 2021 revenue multiple of 18 times and easy to 2021 EBITDA multiple of 32 times, so very rich, very strong multiples. Looking at other comp groups, including bank tech, payment tech, B2B card issuers, those groups all trade at 5 to 7 times revenue compared to our 1.3 times multiple and 17 to 23 times EBITDA versus our 6 times multiple. We're also valued very attractively on a per account basis compared to several other private comps that are out there. Our enterprise value is only $50 per account versus $300 to $2,000 for most of our peers. So overall, no matter how you look at it, we think that our market cap, our stock price, is very attractively valued. Luvleen, I’ll let you wrap up with the investment highlights.
Luvleen Sidhu: Sounds good. On Slide 15. I would like to end by summarizing our key investment highlights. We have an established customer base of over 2 million accounts. We shared record Q2 and first half of the year results with EBITDA up 11 times year-over-year, revenue up 46% year-over-year. We demonstrated deep customer engagement with an unannualized revenue per account up 41% year-over-year, driven by higher average balances and spend. We also showed solid account growth and opened approximately 200,000 new accounts in the first half of this year. We have strong existing partnerships with approximately 735 university partners, T-Mobile and Google. We have developed a proprietary digital banking platform ,which we are ready to roll out to white label and workplace banking partners in the pipeline. And lastly, we have a very attractive valuation, which today is at a deep discount relative to both private and public peers. Once again, I want to thank our investors and shareholders for their continued support and also all the BMTX team members who make all of this possible. Operator, we would now like to open the line for questions. Thank you.
Operator: Your first question is from the line of Mike Grondhahl with Northland Securities.
Mike Grondhahl: First question is just in the new business area. In the last quarter, what sort of incrementally new there and any update just on the marketing efforts that are going on?
Luvleen Sidhu: So the new business is really made up of T-Mobile, as well as other white labels and workplace. T-Mobile continues to be a strong component of that new business opportunity. And what I can say about that is that T-Mobile continues to be very strong opportunity, is the biggest contributor to the new business segment as I shared. The numbers really speak for themselves. We cannot share out more really with respect to our partner. But we continue to distribute the product into new T-Mobile channels and enhance the product to drive further acquisition and engagement. And in my opinion, we really are at the beginning stages of what the potential for this partnership could be. And we look forward to sharing more as we continue to build out the partnership.
Mike Grondhahl: Switching over to higher education in the college campuses. Any update on sort of the Google co-brand timing, what's the latest thinking there?
Luvleen Sidhu: So what I can say with full confidence is that Google and BMTX have unwavering commitment to our partnership and to the product that we want to bring to market. We still believe strongly that a BankMobile Google Plex account can lead to significantly more students choosing to bank with us. And what I think that we said last time and we continue to stand behind is that in terms of timing continue to work with Google to bring digital first bank accounts to the market, if not in late 2021 than in 2022 and we remain consistent with that timeline.
Mike Grondhahl: And how are you're feeling about the back to school season? Colleges are going to ramp up here any day. Do you feel pretty good, is everything sort of set there?
Luvleen Sidhu: So we feel good about it. We always really benefit from a fall peak season. So as students come back to school in August, September, October and then again in that January, February timeframe. So we love that time of the year. I do want to emphasize that even if students are not coming to campus, because of anything that develops with the Delta variant, et cetera, that has very minimal to no effect on our business, because students continue to get refunds whether or not they are on campus or not. And so we're feeling excited about the fall peak, We have our kind of marketing really working on new initiatives around both on campus marketing, digital marketing that we are excited to be experimenting with, and we look forward to sharing a status update in the next quarter on how things are going.
Mike Grondhahl: Maybe lastly, just the product journey. What edition do you think is next there? I know you have three things you're kind of working on. But any insight into sort of which one do you think is going to be next?
Luvleen Sidhu: For us, Mike, we're constantly thinking about making sure that we're investing in a product that really solves the pain points for our consumers, and that provides as much value to them. And also hopefully creates revenue generating opportunities for us as well. I would say that all five pillars I mentioned are very important to the customer experience. I feel like we've done a good job of penetrating the banking bucket and the lending bucket. But the lending bucket even has more opportunities in terms of proactive marketing to our non-enrolled students once they graduate or become non-enrolled. And so we look forward to sharing more in the coming quarters of how that strategy is panning out. In terms of adding more products and services, we’ve focused this last quarter on the advice category where I think the partnership with Array is an exciting one, especially given how important it is for student demographics, as well as Americans, in general to understand their credits make better decisions. And so we’ve really focused on the invite category for the last quarter but we'll continue to look into investing insurance and crypto as well into the future.
Operator: Your next question is from the line of Michael Diana with Maxim Group.
Michael Diana: I find Page 7 the most interesting in your presentation here both the growth numbers and the absolute numbers. Obviously, the growth numbers are very big. I'd like to focus more on the absolute numbers and maybe where they could go, for example, revenue per account. Also, one that jumps out. I think in the release, you’d said that of your active new business accounts, the annual spend was $17,000, which is way, way, way below where you are now. So could you just comment on where these numbers might go?
Luvleen Sidhu: Bob, do you want to take that one?
Bob Ramsey : Yes, let me start with that. So Mike, you're right. We do talk in the press release about highly active users in the white label business, which are active users that not only have direct deposit set up but they also have at least five debit transactions in a month. So it's a great demographic. We're really pleased to report that that subset, it has grown to 16% of the white label accounts, which is up from 12% a year ago. And the levels of spend that we're seeing there, I mean, if our dwarfs what are kind of industry averages, it’s a little hard to get that data but we look at some industry studies. It looks like maybe on average debit spend across America runs about $6,500 a year, and so we're multiples of that in that highly active segment. What I would point out here on Slide 7 is that this is actually a quarterly spend number, not an annual spend number. And so we also keep in mind, there's a little bit of apples and oranges there. So in the season business, our quarterly spend at 19.77 would analyze out of close to $8,000. So we actually think that's a really good number too. The performance that we see here we're very pleased with.
Michael Diana: Do you have any comment on revenue per account?
Bob Ramsey: So again, the revenue per account at $45 is a quarterly numbers. So if you were to analyze that out, you’d be at about $180 per account. And just the numbers that we have seen from a lot of our peers out there that actually is a really attractive level of revenue per account. And what I would throw out there at is say this is based on our business today. And as we continue to augment and add products and services, we definitely see that there's upside there.
Michael Diana: And the other metric that I found very interesting in the quarter was your operating leverage. Could you just comment on how you're able to hold the expenses well below the revenue -- the expense growth level below the revenue growth?
Bob Ramsey: So for better or worse, there are a lot of fixed costs in our business. And we had invested a lot in the platform and the technology. And as we now are able to grow the top line, it doesn't require the same level of investment on the bottom line. We do have some growth in expenses, we do continue to invest in the business, we do continue to make some hires. But we are very pleased that a dollar revenue growth does not require a dollar of expense growth or even an exact percent increase the same ones that you see, but we do have positive operating leverage and that's one of the strengths of our business.
Operator: We do have a follow-up from the line of Mike Grondhahl with Northland Securities.
Mike Grondhahl: A couple of follow ups. In terms of the second quarter, I think back in 1Q, you called about you maybe had $1 million to $2 million of benefits from just stimulus dollars running through the model. Any guess in 2Q sort of what the revenue benefit was?
Bob Ramsey: We have been a beneficiary of a significant amount of stimulus into our accounts. We think that really is a good thing. It shows that we've got a primary account usage, we already have on file with the IRS for a lot of our account holders and as they've gotten federal refunds, money has come into our account. We also think this is part of the benefit we've seen student business as they, with the CARES Act, there were disbursements that were made at colleges and universities. We actually have been able to secure a couple new relationships to help us with that federal cares disbursement business with some schools, we have normally had the disbursements for as needed. So there have been opportunities to help our partners with stimulus going on. And we, you did say, quantify the stimulus impact in the first quarter, we said probably is about $1 million. We need to give range a little bit higher. But as we find soon, I do think it's at the lower end of the range we gave before, so maybe a million. This quarter we have seen a much smaller impact of stimulus. So we had over $180 million in deposits came in, in the first quarter of stimulus funds were positive. And the number of this quarter is less than a third of that. We estimate, because there's some tail on the timing of stimulus, the stimulus impact this quarter has been half of what it was in the first quarter. And we continue to pay up as we go through the year. I mean child tax credit, there's still a couple of pieces and you see what happens in there out. But I do think that at this point as we look forward, we think that the lion's share of the lift from stimulus is behind us.
Mike Grondhahl: You guys sort of reiterated guidance of adjusted EBITDA of $20 million to $22 million. You're at $13.8 million through six months, you're basically two-thirds of the way there with half the year to go. Are you guys just being conservative or is this an investment in the back half of the year? How do you want people to think about that?
Luvleen Sidhu: As I said in my opening remarks, we have a seasonal business, especially in the higher educational vertical. And there are some uncertainties around timing. It's more about -- it's not, if but when. For example, the exact timing around the Google lunch, the exact timing around when we bring on a new white label partner. And that is why we have a strategy of really managing our expenses based on timing of our revenue growth. If the revenue growth is achieved quicker, we may be able to beat that. But for now, we are staying with the EBITDA guidance we had given earlier. We are not managing this business really quarter-to-quarter but for the long run and the fundamentals of our business remain strong, and that's what we're focused on doing and communicating.
Bob Ramsey: I would just say that we are not staying in the guidance but we feel really confident about it. So we've had a good start here.
Mike Grondhahl: Earlier, Luvleen, you kind of gave us an update on some of the opportunities out there from new wins and whatnot. Do you still feel confident you can pickup? You've talked in the past about one new win a year, one big win a year? Your confidence level in announcing that this year?
Luvleen Sidhu: I think that we always aspire to have a partner announce a year and we're still working hard towards that. As I mentioned, these deals, because they're meaningful in nature, we're also different from other banking as a service providers, because we provide very customized integrated experience and that high touch experience is valued by the right partners but also takes a longer sort of sales cycle. So what I say is that we have a rich pipeline of exciting opportunities that we are working through and we remain hopeful that we can announce something this year.
Mike Grondhahl: And then maybe just lastly, I think I asked you this last quarter too, but it's a question I get a fair bit. Is just the $0.03 deposit fee that customers’ bank is paying you get to paid for about another year and a half? Have you begun to kind of explore or talk with new providers who would step into that role and sort of how and where is that ?
Luvleen Sidhu: Definitely we're talking to other opportunities. I had mentioned it last time, there's a lot of interested parties. And so we're in a lot of very productive conversations with various bank partner opportunities. And as you mentioned, Mike, we do currently have an agreement with our existing bank partner that runs to the end of 2022. I also want to mention again and remind the investor community a little bit about this deposit servicing fee, and that it's really made up of two components. And the larger proportion of this fee is really to cover the cost of sourcing and servicing these deposits. We have these accounts sitting on a core that we run, we have our own banking operation team, risk management and compliance teams, fraud teams, we run customer care, data analytics, we provide new active fee and networks, et cetera goes on and on and that is what we're getting paid for. And the other portion of the seat, a smaller portion the revenue share on the net interest income from the bank. Right now this is structured more as a fixed amount. But going forward, we're likely to structure this in a more of a variable way. So as rates rise, we will benefit. And if the rates begin to rise and get close to where they were in 2019, we are very likely to get a similar deposit servicing fee as we are getting today. If not, then the rev share we are getting from you know the net interest income will come down for the time being until rates rise again. So that being said, I want to reiterate that we have the agreement in place today with our current bank partner for the time being and existing the cost of servicing fee will stay in place. And we are hopeful that over the next couple of quarters, we will have one or more new bank partners and our objective really remains to negotiate the best possible deal and we'll keep you guys posted.
Operator: There are no further questions over the phone.
Bob Ramsey: We do have a few several questions related that have come in across the webcast. Maybe I'll read out and we can answer some of those. We have two that are sort of around seasonality, and I'll probably take these. The first one is asking why it is that in the quarter with our revenues that were down sequentially, did we see expenses that were not down sequentially? And I think the way that I would answer that is that our revenues are certainly more seasonal than the expenses are. As I mentioned earlier, we are in a business that has a fair amount of fixed costs. Most of our costs are people and that cost doesn't go away just because you've got a seasonally slower revenue line in the quarter. So the seasonality of our business really is much more top line than bottom line and the growth in expenses, I think we're very proud of overall the level of expense growth year-over-year. I think it's been relatively modest. But we do continue to invest and grow the business and that is going to result in some expense growth, which is why you see that expense increase even as we see this quarter-over-quarter a slight decline in revenue. The second question that we have around revenues and seasonality, says, hey, on your last call, you said that you expected seasonality to even out over time. What is the current seasonality? What's the weakest quarter? Can you share some -- shed some light on how you think about this evening out? I guess, I wouldn't quite say even out, I would say that the impact of seasonality will diminish over time as the student business grows at a slower pace than other white label business and workplace business. Those businesses are not seasonal the way the student business is. And so if you look back at two years ago when we were all students, we had a very seasonal business. If you look two years from now when student is maybe half or less of what we do then that seasonality is dampened by the business that's not as seasonal. So it’ll diminish. But I guess I wouldn't say it fully even out. To answer the question that what balance seasonality, the first quarter is certainly our strongest quarter in the student business. It really is that when we've got that spring seasonal sort of peak with students coming to school. But then if you go through the second quarter and you see a pretty material decline. The second quarter does tend to be, I guess, the slowest quarter seasonally. And then as we get into the fall peak around the student calendar, it actually is spread across -- it straddles the third and fourth quarters, because we really -- it's hard to see money coming into the accounts as we go into the end of the third quarter. We end the quarter very strong and we start the fourth quarter strong, and then it tapers as we get into year end. So you sort of got that fall seasonal peak is straddled across the third and fourth quarters. Again, this will sort of diminish over time as we have growth in the other businesses. And I would encourage people to look at the trends and deposits and spend that we do break out for the student versus non-student business to get some better sense of how the seasonality impacts us. Another question that we have and Luvleen, I’ll let you take this one. But it retains crypto. Crypto of course is part of the pillars that we have outlined. And the question is around sort of how are we thinking about the opportunity for crypto, what do we want to do? How is this going to impact the student business, and our goal there of attack attracting and retaining accounts?
Luvleen Sidhu: I'd be happy to take that. We've definitely seen that crypto is growing, more consumers are getting comfortable with it. We're seeing you know, competitors, Square, Venmo, et cetera, offer crypto offerings that seem to being used by customers. And so we definitely want to make sure that our products and offerings really reflect what consumers are looking for and what they're engaging with. And so that's our number one priority. In terms of what that offering might look like, we will share more once we're ready to announce that. As I said before, any partnership that we create we really look for it as solving a consumer pain point and hopefully also a revenue generating opportunity for. In a crypto offering we want to make sure as well that there's a lot of focus on making sure that there's regulatory sort of robustness and compliance focused offerings. And so we will make sure that before we integrate any crypto offering that we're abiding by respecting that framework as well, which is equally as important as looking out for what the customer needs and pain points are.
Bob Ramsey: Thanks, Luvleen . I think we've got time for one more question. So added -- ask it here and I'll start and I'll let Luvleen chime in. But there's a question about the pace of partnerships with schools, the sort of pace of adding schools. And of course, I know we didn't include in a press release today that we had added in the first half of this year schools over 47,000 new students. I will say that I think this is one of the places where COVID has had some impact on our business and that many of our college and university partners are distracted. They may still be remote. I mean colleges in session but I think they're dealing with a lot of challenges and one their business pay day. And I think that that has certainly given some challenge to our sales force to sort to get to pull through that they normally would expect, although, they continue to have really good conversations. We've got a really big pipeline with a lot of schools and enrolled students that we do expect to pull through. So I guess, I just ask Luvleen if you would want to add along those lines?
Luvleen Sidhu: No Bob, I think that that makes sense. And we're always excited about bringing new products and services to the market for our college and university partners to create more sticky relationships, more valuable relationships. And so the release and roll out of vendor pay solution earlier this year, as well as our announcement with TouchNet to really offer our schools a more holistic offering around ID solutions and a more holistic refund disbursement business, are all stuff that we're working on to make sure that we have strong sales pipeline and product offerings for our college and university clients, which is important because it gives us more and more access to students across the country. So with that, I want to thank everyone so much for their questions. And so grateful for your continued interest and support of BMTX, and we look forward to connecting with you next quarter. Hope you have a great day. Thank you very much.
Bob Ramsey: Thank you, everyone.
Operator: This concludes the BM Technologies second quarter 2021 earnings conference call. Thank you for your participation. You may now disconnect.
