TSE:TCS Tecsys Q4 2024 Earnings Report C$39.70 -0.47 (-1.17%) As of 04/25/2025 04:00 PM Eastern Earnings HistoryForecast Tecsys EPS ResultsActual EPSC$0.15Consensus EPS C$0.05Beat/MissBeat by +C$0.10One Year Ago EPSN/ATecsys Revenue ResultsActual Revenue$43.96 millionExpected Revenue$44.57 millionBeat/MissMissed by -$610.00 thousandYoY Revenue GrowthN/ATecsys Announcement DetailsQuarterQ4 2024Date6/27/2024TimeN/AConference Call DateFriday, June 28, 2024Conference Call Time8:30AM ETConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress ReleaseEarnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Tecsys Q4 2024 Earnings Call TranscriptProvided by QuartrJune 28, 2024 ShareLink copied to clipboard.There are 8 speakers on the call. Operator00:00:00Good morning, everyone. Welcome to Texas 4th Quarter and Fiscal Year 2024 Results Conference Call. Please note that the complete annual and 4th quarter report, including MD and A and financial statements, were filed on SEDAR Plus after market closed yesterday. All dollar amounts are expressed in Canadian currency and are prepared in accordance with International Financial Reporting Standards. The company has added a companion presentation to today's call, which is available on their website at www.texas. Operator00:00:32Com/investors. Some of the statements in this conference call, including the question and answer period, may include forward looking statements that are based on management's beliefs and assumptions. Actual results may differ materially from such statements. I would like to remind everyone that this call is being recorded on Friday, June 28, 2024 at 8:30 am Eastern Time. I would now like to turn the conference over to Mr. Operator00:01:00Peter Burton, Chief Executive Officer at Texas. Please go ahead, sir. Speaker 100:01:08Good morning. Joining me today is Mark Feltler, our Chief Financial Feltler, our Chief Financial Officer. We appreciate you joining us for today's call. As most of you have likely seen in the results issued last night, fiscal 2024 has been an outstanding year for our organization, marked by significant achievements and strong organic growth. Our year over year SaaS revenue is up 39% and our RPO continues to grow, up 43% over last year. Speaker 100:01:36Our momentum continues across the board with emerging opportunities in new marketplaces and a clear path for sustained performance. Our vision for growth is sharper than ever, supported by investment in technology and an obsession with customer success. I'd like to take a moment to summarize the key events of our Q4 and full year results for fiscal 'twenty 4. Mark will then walk us through the financial results in more detail. And finally, I'll comment on our outlook followed by a Q and A session. Speaker 100:02:04If you're following along in the companion deck, I'll be speaking to Slide 3. Q4 has been a fantastic capstone for the fiscal year as we continue to break our own records. We achieved the highest quarterly revenue in our company's history. We achieved the highest SaaS bookings in our company's history, including migrations and expansions across verticals, and we welcome 2 new healthcare IDNs. Our bookings this quarter were up 108% over last year and 37% higher than our best quarter ever. Speaker 100:02:35While we hardly expect this to be the new run rate, we're very happy with this high watermark in quarterly bookings, which brings our fiscal year bookings to a 13% increase year over year. On to RPO, due to strong bookings as well as extensions and renewals in fiscal 2024, our SaaS RPO is growing at a healthy clip, up 43% to $197, 000, 000 compared to the same time last year. Just thinking about that a bit, that means that over the last few years, we have built a backlog of SaaS that has something like 130, 000, 000 dollars of contracted but unrecognized gross margin contribution that will flow through in the years ahead. That is pretty exciting stuff. In terms of milestones, a year ago, we announced that we crossed the 50% threshold of our recurring revenue being SaaS revenue. Speaker 100:03:25A year later, we're now looking at SaaS revenue representing 64% of our recurring revenue. It's worth mentioning that our positive momentum and growing SaaS customer base is underpinned by very robust gross and net retention levels. We are cementing our position as the system of choice for organizations grappling with supply chain complexity. From the Texas Children's Hospital, the largest pediatric facility in the United States, to Baptist Health, a major health system embarking on a consolidated pharmacy service center and from Truepill, the pioneering digital pharmacy provider to Roche, which I mentioned in a previous call, we are adding top tier organizations to our customer list that recognize the value that Texas delivers. This value is reinforced by organizations like Nissan, Intermountain Health and Mayo Clinic, who are sharing their experiences in panels and presentations like those at our user conference last September as well as at regional workshops through the year or in industry publications like Becker's Health Care and Fortune. Speaker 100:04:29With this customer growth comes an expanding white space opportunity. In healthcare, this is especially significant because we often enter an account in a single department or with 1 solution. As we prove out the value of that solution, our end to end health care offering now gives us a lot of flexibility into how we can penetrate further into each account. Earlier this year, we gained traction around the CPSC or Consolidated Pharmacy Service Center model, essentially replicating the successful that we brought to a health systems med surg supply chain and adapting it for the pharmacy, which with engagements at St. Luke's, Parkview Health and Baptist Health, we're proving out the model and significantly increasing the white space in our existing base and the total addressable market within an industry where we already have a solid foothold. Speaker 100:05:18We seem to be again emerging as the market leader in the CPSC space, and we're very quickly securing wins with major IDNs. We're also continuing to build and strengthen our partner ecosystem throughout this fiscal year. This effort is proven valuable with 26% of our deals and half of our new logos being partner influenced. As part of our partner program, we became the only WMS provider to achieve AWS supply chain competency in 3 categories, which was announced in January. As previously discussed, we initiated a major restructuring in the 4th quarter to boost long term profitability. Speaker 100:05:56I'm pleased to confirm that the end results came out fairly closely with what we had anticipated. Our expectations regarding the impact on our run rate and the cost we expected to incur were quite accurate. This restructuring was an important step for us as we continue to increase our investment in areas of growth. As we continue to invest in the products we sell in the manner in which we sell them, Texas has proven to be among the best cloud based solutions available in the markets we serve. The steady growth we have experienced affirms our vision and strategy for shareholder value. Speaker 100:06:31Mark will now provide further details on our Q4 and the full fiscal financial year results as well as financial guidance on several key metrics. Speaker 200:06:42Thank you, Peter. We're very pleased with the strong performance in our Q4 ended April 30, 2024. I'll start with Slide 4 and focused first on SaaS. SaaS revenue continues to be the key driver for our growth and we believe the key driver for value creation. SaaS revenue growth is driving our recurring revenue and during the 4th quarter, SaaS revenue growth was 27% compared to the same quarter last year, reaching 14, 200, 000 The big news, as Peter mentioned previously, is our record setting $8, 000, 000 of SaaS bookings in Q4. Speaker 200:07:20Our higher growth SaaS revenue is now poised to overtake professional services revenue as our largest single source of revenue, and we expect this to continue to play out in fiscal 2025 and beyond. Total revenue for the quarter was a record $44, 000, 000 that's 7% higher than the same period last year. On a constant currency basis, total revenue growth was 5%. Professional services revenue for the Q4 was $14, 400, 000 That was down 2% from $14, 600, 000 reported for the same quarter last year, but up 11% on a sequential basis from Q3. Professional service backlog continues to be strong at $32, 100, 000 as of April 30, 2024. Speaker 200:08:13For the Q4 of fiscal 2024, gross margin was 47% compared to 45% in the same period last year. Combined SaaS, maintenance, support and professional services gross profit margin for the 3 months ended April 30, 2024 was 50%. That's up compared to 47% in the same period of fiscal 2023. SaaS margin expansion was the driver and we're pleased to report that this continues to track as planned. Net profit in the quarter was relatively flat at $259, 000 compared to $446, 000 in the same quarter last year. Speaker 200:08:58Net profit in the quarter was negatively impacted by $2, 100, 000 restructuring charges and this was broadly offset by positive comparable impact from foreign exchange and income tax attribute recognition in the current quarter. Adjusted EBITDA was $2, 800, 000 in Q4 of fiscal 'twenty 4 compared to $2, 400, 000 in the same period last year. I'm going to turn now briefly to our results for the full fiscal year 2024 and move to Slide 5, you're following along in the deck. Our total revenue was $171, 200, 000 that's up 12% compared to $152, 400, 000 in the same period last year and up 9% on a constant currency basis. SaaS revenue for fiscal 'twenty 4 was $51, 900, 000 up 39% from $37, 500, 000 dollars in the same period last year, and that was up 35% on a constant currency basis. Speaker 200:10:04Our adjusted EBITDA for fiscal 'twenty 4 was $9, 600, 000 compared to $9, 500, 000 in the same period last year. Basic and fully diluted earnings per share were $0.13 in fiscal 'twenty 4 compared to $0.14 in fiscal 'twenty 3. We ended Q4 fiscal 'twenty 4 with a solid balance sheet position. We had cash and short term investments of $35, 600, 000 and no debt. Operating activities provided $4, 900, 000 of cash in fiscal 'twenty 4 and during the year we used $7, 200, 000 to repurchase shares under our NCIB. Speaker 200:10:48Additionally, the Board yesterday approved a quarterly dividend of $0.08 a share. With respect to financial guidance and now moving to Slide 6, we're providing full year 'twenty 5 guidance as follows: number 1, total revenue growth between 7% 9% number 2, SaaS revenue growth between 30% 32% and finally, adjusted EBITDA margin between 8% 9%. Additionally, we're providing adjusted EBITDA margin guidance for fiscal 2026 of between 10% 11%. I'll now turn the call back to Peter to provide some outlook comments. Speaker 100:11:39Thanks, Mark. Texas performance in fiscal 2024 started out strong and that momentum continued through the year. We have a solid balance sheet and continue to have a robust backlog and sales pipeline. We are seeing widespread buyer intent across our target markets and the opportunity cycles are being accelerated by a highly capable sales team with the tools, the talent and the partners to capitalize on a market that's ready to invest. As I mentioned earlier, our expanded healthcare sector offering and growing footprint gives us confidence that the healthcare market will continue to be an important growth engine for us. Speaker 100:12:15We have an exciting value proposition within that pharmacy space with multiple proof points and a growing acceptance of the consolidated service model for pharmacy distribution. Over and above our IDN business with the added pharmacy white space, we are seeing growth signals in our medical and pharma distribution sector, driven partially by legislative pressure from the U. S. Drug Supply Chain Security Act, DSCSA, which requires traceability to Texas solutions enable. We are also well positioned to pursue new marketplaces and geographies within the converging distribution space, and we will continue to invest to expand our overall growth. Speaker 100:12:56Our distribution business represents a massive market opportunity, and we're still only scratching the surface. We continue to hone our sweet spot there and carve out our share of that pie with rising market indicators driven by fundamental change to the supply chain industry. Changes spurred by aging legacy systems, digital adoption and a realization that heightens consumer expectations are here to stay. We are pleased that our fiscal 2024 results continue to demonstrate our dominance in key markets and emerging opportunity in growth markets. The wave of change and system modernization and supply chain management is underway and businesses are actively investing in the tools that they need to adapt to consumer expectations. Speaker 100:13:37As we look ahead to fiscal 2025, we are confident in our ability to seize market opportunity and presence in this rapidly growing market in North America and expand our footprint in European markets. And so in summary, I want to share with analysts and investors some key themes for fiscal 'twenty 5. First, an emphasis on continuing to refine our SaaS software, so it is easy to use and upgrade and even easier to recommend to peers. 2nd, a continued strategic partnership approach characterized by deeper and stronger alliances. This helps us tap into new opportunities and fuels our scalability around the world. Speaker 100:14:183rd, an emphasis on advancing and deepening our healthcare vertical covering both MedSurg and Pharma as we continue to solidify our position as the go to provider for healthcare supply chain solutions. 4th, a continuous evolution of our distribution and omnichannel business platform that takes advantage of innovative technologies and the power of data. As a final point, I'd like to stress across our markets, we will prioritize customer satisfaction and success. We have long stood by the philosophy of customers for life. A big part of that formula is to deliver value quickly, stay connected and expand on the value delivered. Speaker 100:14:55With that, we'll open up the call for questions. Thank you. Operator00:15:00Thank you, sir. Our first question comes from the line of Andy Wen from Raymond James. Go ahead please. Speaker 300:15:38Hi, thank you for taking my questions. So your fiscal 'twenty 5 guidance implies slower growth on the top line. Maybe you could share some more color on what you're seeing in the market? Speaker 400:15:52Yes. Peter, you want to take that Speaker 200:15:55or you want me to add? Speaker 100:15:57Yes, sure. I can comment. Maybe you can add some detail. But yes, I mean, overall, it's really just a question of as our business continues to transition with increasing partnerships and alliances and organizations like whether it be Deloitte or KPMG or RISE NOW or Avalon, they're assisting us with a lot of implementation. So what you end up with here is a rapidly growing SaaS revenue line, but which currently represents, let's round it off here, a third of our revenues. Speaker 100:16:30So when SaaS represents a third of our revenues and it's growing in the 30% to 40% range, but most of the rest of the business is the trend lines are close to flat. That's what you end up with. You kind of end up with a 10 ish kind of percent growth range. So that's what we're seeing. And I think as the business continues this transition as SaaS revenues become a higher and higher percentage of the total, that top line growth revenue is going to rise, break back up again along with the SaaS. Speaker 100:17:00This is probably our last year of transition out of the license model. I mean, maybe you could say last year was, but it's the fact is license revenue is now sort of virtually gone. So because of that, your SaaS revenue comes is well finally able to start really shining through, no longer being dampened by declining license fees, but it is still has to get averaged into what is much, much slower growth professional services and virtually flat hardware sales. Speaker 200:17:36Yes. Andy, I would just add to that that if you hardware for us in 'twenty 4 was a pretty you see those growth numbers. I mean it was up 21% year on year. And if you take that sort of hardware growth out of it out of the numbers, that 24% revenue growth was around 11%. And we expect in that 7% to 9% if you take hardware out of that, we expect that growth rate to actually be higher than 11%. Speaker 200:18:09So we are actually seeing accelerating growth here if you strip out the impact to hardware. We entered fiscal 'twenty 4 with a very robust backlog of hardware that kind of built up during the COVID years actually where it was kind of hard to get hold of some hardware stuff. That stuff delivered out beyond proportionally in fiscal 2024. So we actually expect hardware to moderate in 2025 back down to levels that are closer to what we saw in fiscal 'twenty 3. Speaker 300:18:46Got you. That makes sense. My next question would be about the win rate in your complex distributions. Like do you see that changing? Is it getting better? Speaker 100:18:59I mean, it's holding fairly steady. I mean, part of it is that that's a market where there's it began to get really active about a year ago, but we're really only starting to see deals go to signature now. And so we continue to win our fair share there. I mean historically we've won in the sort of 30% to 40% range of those yields. We're trying to nudge that up. Speaker 100:19:24We're trying to get that up closer to 50%. There's quarters where it sags below 30%. There's quarters where it does get up higher. But the good news for us is that that market is actually starting to move and sign some deals. So we were pretty pleased with the performance of that particular market in fiscal 'twenty 4, and we've got great hope for it in fiscal 'twenty 5. Speaker 300:19:48Perfect. And maybe on the pipeline complex versus healthcare, what's the percentage mix between those? Can you hear me? Speaker 100:20:07Sir, I lost you there for a bit. You seem to be back now. Speaker 300:20:11Yes, yes, sorry. So I was asking, how much is the pipeline mix between complex distributions and healthcare? Speaker 100:20:19Mark, what would it be right now? It's got to be close to fifty-fifty, right? Like the thing is our win rate is so much higher in healthcare that if you've got the same amount, technically of the same amount in each pipeline, you're still likely to book twice as much healthcare as complex distribution. But I think in terms of total we look at the 12 month pipeline and they're pretty close at this point. Speaker 400:20:48Yes. Got you. Speaker 300:20:52Yes, and then sorry, so I was just about to ask, so on the revenue side of view, point of view is probably roughly the same too, right? Speaker 200:21:02Well, actually our revenue mix is it's an interesting question you asked there, Andy. I mean, this is sort of the first point where our healthcare business is actually just surpassed the complex distribution business in terms of annual recurring revenue. So it's still a pretty even split there. You might know that our legacy business was very much more directed at complex distribution and more recently the healthcare sector has been growing more rapidly and that's finally resulted only recently in healthcare surpassing complex distribution as the bigger ARR contributor, but just barely. Speaker 500:21:47Got you. Operator00:21:53Our next question comes from the line of Amir Azat from Vinton Financial. Go ahead please. Speaker 400:22:01Good morning, Pierre and Mark. Thanks for taking my questions. Just to close the loop on hardware for 2025, did I understand correctly that we should be looking for flattish hardware in 2025 as opposed to lower year on year from what was obviously a huge 2024? Speaker 200:22:20Yes, I would say right now our expectations are, I think 'twenty 4 was a bump up and I think 'twenty 5, you should think more about 2023 sort of levels. Speaker 400:22:33Okay. Okay. Okay. Got it. Then maybe if we double click on SaaS revenues. Speaker 400:22:41So as far as like your SaaS backlog and RPO are concerned, they seem to be growing at a higher growth metric relative to what you're guiding for SaaS growth in 2025, 30% is still impressive. But I just wonder I'm wondering like are you guys capacity constrained, be it internally or through your channel partners on delivery? Or how do I reconcile that like higher sort of staff backlog and RPO number 2, what's your guiding? Speaker 200:23:13Well, RPO, I mean, the big delta there is RPO is a multiyear Yes. Is a multiyear calculation, of course. So renewals and renewal timing, which really for us started to kick in. Actually Q4 was really almost 1 of the first times where we had some pretty material renewals that actually impacted RPO in some meaningful kind of way. So that started to that drove up the RPO growth number. Speaker 200:23:46The other thing is we've got some customers that are going with longer term contracts. We usually talk about 3 to 5 year contracts. And we saw in that quarter a disproportionate amount on the high side of that and some even higher than that in terms of contract term, which is great because it shows that people are confident enough in us in our platforms to sign up for longer term contracts. The positive side of that is increasing RPO and in that scenario would increase faster than annual revenue growth. Speaker 400:24:25Understood. That's very clear. Then can you just refresh us on the accounting? Is there like any difference in the margin or the gross margin profile of renewals versus like the initial like contract? Speaker 200:24:43Not really. I mean, a like for like renewal on the platform, we're going to get an uptick most typically when we do a renewal, we're going to get a CPI or CPI plus kind of uptick. So that will be maybe a little bit accretive margin, but every year our costs go up as well. We have merit, we have salary increase and all the rest of it. So there's not I would say there's not in a like for like deal, there's not necessarily much margin expansion. Speaker 200:25:18What typically happens though, Aymer, is that that's the time where when people are looking at that and looking at the renewal period and ending up for the next sort of contract period, that's an awesome selling opportunity for us. So that's typically when we're in there working hard to add additional modules and a very a very significant expansion impact on SaaS margins when we add on new modules to existing customers. Speaker 400:25:55Fantastic. Well, maybe 1 last 1, like speaking of like expansions, when thinking about your guidance on SaaS next year, can you give us a high level like the splits of how much of the growth is like e logos versus expansions and migrations? I believe like less migrations now, but Speaker 200:26:17Yes, yes, yes. I think that's right. I think that's what we expect to, Aymer, especially on the healthcare side when since we've converted a large quantity of those healthcare customers are already on the SaaS platform. There's still a lot of opportunity for migrations in complex distribution. But that said, we do see that we do expect that migration componentry to slow down a little bit. Speaker 200:26:48In terms of the kind of the new versus base splits, I mean, if we look what happens historically, it runs from sort of 20% in the 20% to the mid-40s and even 50% is new business in any given quarter. If you average that out over time, it's sort of in the high 20s around 30%. And that's kind of how we model this going forward. If we look at our pipeline and the opportunities that are in the pipeline, I would say there's more new logo business in the pipeline now than there has been in the past if we looked at the same time last year. However, our win rates on those expansion deals in our pipeline and the sales cycles on those expansion deals are much, much, much quicker. Speaker 200:27:48So that we've got a lot of white space in that base. As you know, we're only about we're in the 20% level of penetration in our white space in healthcare. So there's still a lot of opportunity for us there. Speaker 400:28:03Fantastic. And just 1 last 1. When you're saying like that 20% penetration ID, you could still like upsell or expand like 80% of your Yes, exactly. Okay. I appreciate that. Speaker 400:28:20I'll pass the line. Speaker 100:28:23Thanks, Eric. Operator00:28:25Our next question comes from the line of Gavin Fairweather from Cormark Securities. Please go ahead. Speaker 600:28:39Yes, SaaS growth guide. Do you guys expect bookings to be more back end weighted? And do you plan to grow bookings in fiscal 'twenty 5? Any color would be helpful on that. Sure. Speaker 200:28:52Could you I think I didn't hear you at the beginning of that. I don't know if it was maybe just on my side. But could you start the front end could you start that question over? Speaker 600:29:01Sure. Just on the SaaS growth guide, you expect bookings to be more back end weighted. If you could just talk about the cadence of bookings in the next year, Speaker 100:29:10that would be helpful. Speaker 600:29:11And then just given that the record year end bookings, can you maybe just talk about any expectations for growth year over year in that bookings figure? That would be helpful. Speaker 300:29:24Yes, I Speaker 100:29:24mean, just 1 overall comment. I mean, first of all, we don't give bookings guidance. It's too hard to give it. Our accounts tend to be that we book tend to be quite large. And as a result, the bookings are just plain lumpy, always have been. Speaker 100:29:40They'll continue to be that. When you're if you look at this past fiscal year where we ended up at sort of $17, 000, 000 and change or whatever in bookings, so you're looking at a call it a $4, 400, 000 whatever $4, 500, 000 average quarter. And meanwhile, you can have 1 booking that's $2, 000, 000 It's just too hard to predict that. At the same time, what I would say is, generally speaking, there is some seasonality to our bookings. Like if you look at our last 10, 15 years, you'll see it holds pretty steady. Speaker 100:30:15Typically, some exceptions, but typically the quarter we're in right now that ends July 31 tends to be a little light in bookings. You clean it out for year end kind of so May is pretty dry. Starts to come back in June, you get some bookings in the early part of July and then vacations kick in and it's hard to get decision makers in a room to sign off on contracts. So that 1 tends to be a little light. Q2 tends to pick up. Speaker 100:30:39That's the quarter ending October 31, usually a little bit stronger. Q3 is which is November, December, January tends to get hit with a lot of vacations again. You got American Thanksgiving in there. You got Christmas in there and so on. Tends to be a little bit slower. Speaker 100:30:54And then Q4 is typically quite strong with sort of no real vacations in there, February, March, April is kind of just work, work, work. So it's a good time to get a lot of business done. So it tends to kind of follow that pattern. And because, of course, we continue to grow, typically, it does tilt towards the back end of the year. But I would also say, Mark, I think you would agree that the fiscal 'twenty 4 that just ended was tilted far more to the back end of the year than we typically see. Speaker 100:31:29And I think the reason for that is what was going on in the healthcare market. I mean calendar 2023, and I think I might have mentioned this last call, calendar 2023 was a year that was characterized by like 10 roughly 10 months of negative cash flow for the average American hospital network. And it was really November before they started turning cash flow positive. So there was a lot of hesitancy in that market during that time period to sort of kick off new projects or accelerate projects, add additional resources to projects. So we saw it in bookings. Speaker 100:32:03We saw it in professional services revenues. We saw it hit a number of places. As they turned back cash flow positive in November, December, and they really stayed cash flow positive since then, We saw a lot more activity starting to happen. So as a result, that really slowed down the first sort of 2 thirds of our year and then it sort of ended with a real kick at the end. So there is some seasonality, but fiscal 'twenty 4 was exceptionally back end weighted. Speaker 200:32:35Yes. I get why you're asking the question there too because it's somehow it's hard if you're thinking about how to model that revenue coming off of new bookings, you're kind of wondering why are you expecting bookings to decline or expecting bookings to grow because you don't necessarily there's enough modeling flux in there to maybe not understand that. But we had 13% bookings growth in fiscal 'twenty 4. And just to be clear, we expect bookings growth in fiscal 'twenty 5. Speaker 600:33:08That's great. Thanks so much guys. And then just given the cuts and the margin guide being unchanged, could you give maybe more color on your investment plans for sales and R and D? Speaker 100:33:22Sure. We have got I mean, as we sort of talked about in the planned part of the script, I mean, we're seeing tremendous opportunity in areas like hospital pharmacies. We're seeing opportunities to invest in AI to dramatically strengthen forecasting, demand planning, inventory optimization. We're seeing opportunities around master file maintenance using artificial intelligence. So we're seeing a lot of opportunities to enhance and strengthen our competitive position in markets that have a huge amount of growth. Speaker 100:33:59So we did the restructuring. We cut costs in a number of areas that we felt that we're sort of already that we're not benefiting from the initial investment. And we've really just shifted that investment over to areas of the business that we think have some pretty exciting growth in the coming quarters years. So we said that at the time. I know a number of people sort of just expected sort of an extra $4, 000, 000 in profit. Speaker 100:34:28But as we stated at the time, it was always our intent to shift the investment to areas of the business with stronger growth potential, and that's what we've done. And we're excited with some of the stuff we're coming out with this year. We've got a release coming out in the fall, what we call our Release 24.2 that is we think it's going to be a pretty compelling market offer. Speaker 600:34:54That's great. Thanks. I'll pass the line. Speaker 200:34:57Thanks. Operator00:35:00Our next question comes from the line of John Hsu from National Bank of Canada. Go ahead please. Speaker 700:35:07Hey, good morning guys. Thanks for taking my question. Good morning John. Peter, how should we understand your comments that 2025, perhaps the last year and the transition out of the license revenue? Should we expect some changes in your sales strategy or just changing revenue mix? Speaker 100:35:26Really just a changing revenue mix. I mean, what continued to drive license revenue was really unmigrated customers, right? So you had customers still running the older on prem software and they were still needing to add another facility or adding more users or that kind of thing. They weren't yet ready to transition to SaaS, so they needed to just pay for more licenses. But as time has gone on, many of our larger accounts have migrated to our SaaS platform. Speaker 100:35:55So they're just off that platform. There's still a few that are left. I mean, in quantity of clients, there's still many that are left. But in terms of sizable clients, there's not that many that are left on the old on prem platform and we have a strategy to sort of continue to migrate those over. So as a result, they're sort of the white space, if you will, in that on prem base is just evaporating. Speaker 100:36:23And it was always our intention. I mean, we never intended to continue to sort of run the license business indefinitely. So it's finally really kicking in. And well, I shouldn't say finally, it's been gradually kicking in over the last few years. But it's now at a point where if I look at this coming year, what's license revenue going to be? Speaker 100:36:43Is it going to be 1%, 1.5%, 3 quarters of percent, I don't know what it's going to be, but it's becoming pretty insignificant in terms of the total number for the year? Speaker 700:36:57Okay. We understand the healthcare market is quite strong, but on the complex distribution front, any planning action to potentially monetize the opportunity in the space given some of the competitors are essentially gone? Speaker 100:37:15Yes. I mean, we're you're talking the general distribution space, right? Yes. That's correct. Yes. Speaker 100:37:22I mean it's something we're actually turning up our marketing spend in that space. We're sharpening our message there. We're looking to add sales capability well. We're looking to add sales capability in Europe as well because we're seeing opportunity over there and opportunity to pursue more global opportunities. So we're doing it cautiously. Speaker 100:37:46I mean the healthcare market is very hot right now. Pharmacy market within healthcare is incredibly active. So we don't want to spread ourselves too thin. But at the same time, that market is heating up. And you're right, the competitive situation has thinned out quite dramatically over the last couple of years. Speaker 100:38:06So we are turning up the investment there. We want to see how it goes. We'll probably give it the first 2 thirds or more of the year to see sort of is it shaping up the way we think it's going to shape up. And if so, I think you can expect to see us turning the investment up higher there towards the end of the year and into next fiscal. Speaker 700:38:27Okay. Thanks for the color. And in terms of the $8, 000, 000 stock bookings, could you maybe help us understand the components of that number? Are they multiple small deals or a few large ones? And also, how much of the bookings are related to new wins versus expansions? Speaker 100:38:46Finally, somebody asking a question about that fantastic booking quarter. Mark, do you want to talk through some of those numbers? Speaker 200:38:56Yes, sure. Yes, John, the mix in that was pretty spread around. We had healthcare contribution in there. We had good solid complex distribution contribution in there. We had some we had several migrations in there. Speaker 200:39:21We had a couple of actually 3 healthcare migrations in that thing, which kind of come back to the other point, what's kind of left in there to migrate after this quarter in healthcare like that was 3 reasonably good size migrations in there, which we absolutely love because these are IDNs that know us. They know our platform as on prem customers and all 3 of these have decided in that quarter to kind of join in and migrate over and continue the journey of expanding their and improving their supply chain management with our platform. So we're pretty excited about that. We had another migration in that quarter that was in complex distribution, which is again fantastic having that sort of vote of confidence from that sector and from an existing customer. On the new business side, Peter mentioned we had a couple of new IDNs, a couple of new healthcare IDNs in there. Speaker 200:40:36Not massive for starts, but kind of normative size ARR wins on those 2, still a bunch of white space for both of those. We had also sort of a 3PL medical supply 3PL related company that was a new logo in that quarter. So it's really kind of all over the place. There we had some nice expansions. We had some expansions that were driven by pharmacy. Speaker 200:41:10Peter mentioned is mentioned and talked in the opening comments about that marketplace and we had some nice wins in that market. So it's kind of it was 1 of those quarters that kind of it was kind of firing on all cylinders. I would say there was more from a dollar basis, there was definitely more new definitely more base business in there. I mentioned all those migrations. So there was definitely more kind of base business and expansion business coming out of that in dollar terms than new logos, but we're happy to see the new logos from across both those verticals. Speaker 700:41:52Okay. That's great color. And Mark, when you say migration, are they migrating from competitors or migrating from legacy platforms? Speaker 200:42:00Yes, good question. I was using that term in the latter sense, meaning on prem customers migrating to our SaaS platform. Speaker 700:42:09Okay. Thank you so much. I'll pass the line. Speaker 200:42:13Thanks, Operator00:42:23Our next question comes from the line of Suthan Sukumar from Stifel. Go ahead please. Speaker 500:42:33Good morning, gents. Good morning. So our first question is 1 of the touch on win rates. It's good to hear that you guys are seeing your win rates sustained with potential for that to improve. Can you speak a little bit about what pricing power you're seeing in the market today and what trends you're also seeing from a contract average contract value basis on all the net new business in your pipeline? Speaker 100:43:05Yes. Let me just comment on pricing power and then Mark can about average contract size. I mean, from a pricing standpoint, we are seeing to divide the markets in my comments. So on the healthcare side, we're seeing a very good pricing power, partly because the ROI is so clearly definable. We go into a typical hospital situation. Speaker 100:43:26We can do a high level analysis with them to show them what their return on investment is going to be, and that return on investment is very strong. We increased our prices by about 30% approximately a year ago. We are waiting to see sort of how that went over and was similar discount sort of similar discount rates to prior year even though we increased the prices by 30%. So and it's because again it's a proven solution with a strong ROI, it's easy to justify that pricing. The general distribution market is more it is more competitive. Speaker 100:44:08You're typically replacing existing systems. So the ROI is often harder to sort of nail down in concrete terms. Usually these systems are being replaced because they have to be replaced. They've literally just aged out or they're not secured anymore. They're not coping with current business needs. Speaker 100:44:29So there is some ROI, but it's not quite as black and white. And there's more competition in that space. That said, the average price of a user, I would say, has not really moved other than sort of inflationary adjustment in over the last 4 to 5 years. It's actually held pretty steady. And if you compare us, our price per seat that we're able to get is very similar to what Oracle is charging and SAP is charging and Manhattan and other significant players in supply chain. Speaker 200:45:06And in terms of contract size there, the average contract size, we usually think about that in the context of just the SaaS ARR componentry there. So that's how we kind of track that number and talk about it internally. And it's a bit of a tale of 2 different sizes depending on which vertical we're in. There's big ranges in both verticals. I mean Peter mentioned 2, 000, 000 ARR booking deals. Speaker 200:45:39There's 2, 000, 000 plus deals out there on the large size. And on the smaller side, there's sort of sub 200, 000 ARR deals. And so if I separate the broad averages between those 2 markets, healthcare's average ARR is somewhere at around $600, 000 again with a big broad range and distribution retail is a little bit lower than that about 300, 000 to 400, 000 average ARR. Speaker 500:46:15Okay. Great. Thanks. That's helpful. The second question I had was more on the expansion motion that you guys have in play here. Speaker 500:46:29What are some of the levers that you have here when you are going through these expansion conversations or renewals with existing customers? Is there a larger is there an opportunity here to capture more value with migrations? And what do expansions typically look like for you guys? Speaker 100:46:56I mean, across the 2 markets, first of all, the general distribution market, it's pretty straightforward. Expansions are either if you look at our order management platform for direct to consumer, expansions typically seem to evolve in new countries. They may have already put France and Germany on the platform and now they're going to add the Middle East or they're going to add some other area. They may have already been in the U. S. Speaker 100:47:20And they're expanding somewhere else. In the in spicing execution, it tends to be additional facilities. We've got, for instance, electrical distributors that every quarter or 2 add another distribution center onto the platform. And so that's the expansion there. In the healthcare market, it tends to be a whole new area of the hospital. Speaker 100:47:43Sometimes it's an additional hospital building they may have started with. They've got 18 hospitals they may have started with doing general supplies in 6 of the hospitals and now they're circling back to the other 12. But very often, it's a complete new initiative for a whole new area of the hospitals business. Most recently, of course, as we've discussed, it's been pharmacy. A lot of additional opportunities in pharmacy to manage the whole pharmacy supply chain from forecasting and demand planning right through to patient bedside with 340B price management and Drug Supply Chain Security Act compliance and so on. Speaker 100:48:22So that is what they're doing there in many cases, they're moving to individual patient dosages being shipped directly from a central pharma facility. So rather than sort of a patient checked into a hospital and the patient's in for, they think it, let's say, a week, So he arrives on a Monday, and it used to be the pharmacy could send out to that ward enough drugs for that patient for the week. Will then on he arrives on Monday, he checks out on Wednesday instead of being there for a week. Well, now there's 5 days worth of drugs left over out of that department. They pretty much never get cycled back into Central. Speaker 100:48:59I mean depending on how they've been handled and where they've been stored, you might not be able even be allowed to cycle them back in. So that drug is just waste, whereas in a central pharmacy distribution model on our platform, the drugs are literally being sent out every day for patients every day with individual dosages for those patients. So you virtually eliminate that kind of waste. You know where the drugs are throughout the supply chain. And with the cost of drugs these days, that is worth, in many cases, tens of 1, 000, 000 or more to a hospital level, so on an annual basis. Speaker 100:49:38So that is an area that is probably the hottest white space for us right now. Speaker 200:49:45And Suthan, I would add to that that we scale that market. There's 373 IDNs in the U. S. Market that are target. They're over $1, 000, 000, 000 in a patient revenue. Speaker 200:50:01And we sort of scale that market. I think conservatively at over $3, 000, 000 on average of ARR opportunity per network. So the market is massive. And I just mentioned our average deal size in that market, big variety, but an average of $600, 000, 000 So if you just think about that $600, 000, 000 deal, we're trying to penetrate into an opportunity that's bigger than $3, 000, 000 with that IDN. So for new deals that we're signing when we're creating that additional logo, we're creating a 5x to 6x opportunity on white space expansion. Speaker 500:50:46Okay, great. No, that makes sense. And last question for me guys, just on the legacy maintenance and support line. How are you guys thinking about the erosion in that revenue line as you start to migrate the long tail of customers still on premise model? Speaker 200:51:07Yes. It's a good question. We talked a little bit before about that revenue growth guidance that we provided and why is it when SaaS is growing so quickly, why is that overall revenue growth line much more moderated? And I talked a little bit about hardware and the impact that has on that number. But the point you're bringing up is another 1 like that number has been sort of flattish this year. Speaker 200:51:36And we expect and we've been talking about it sort of declining as more migrations kick in and the payment of maintenance supports ends and turns into a SaaS only revenue stream, Like we're in the process of that, still expecting that that line is not going to grow. It's it's probably going to decline we're probably going to be declining on maintenance and support. I mean, we said that last year too that that was our expectation. It didn't quite happen. It's kind of being supported by some of our other non SaaS annual recurring revenue on in particular on hardware maintenance that comes into that maintenance and support line. Speaker 200:52:23But we do expect that line to be flat to declining in fiscal 'twenty 5. Speaker 500:52:31Okay. Thank you. Thank you, guys. I'll pass it on. Speaker 300:52:36Thank you. Speaker 200:52:38Thanks. Operator00:52:40Thank you. There are no further questions at this time. I'd now like to turn the call back over to Mr. Burton for final closing remarks. Speaker 100:52:48Great. Well, thank you, everyone. Thanks for spending time with us today. We're delighted with how we ended fiscal 'twenty 4, and next call will be both Q1 of fiscal 'twenty 5. So we'll talk to you in early September. Speaker 100:53:01In the meantime, if you have any questions, don't hesitate to reach out to Mark or myself. We're always happy to have further dialogue. Thanks. Have a great day. Speaker 200:53:10Thanks. Operator00:53:11Thank you, sir. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a lovely day.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallTecsys Q4 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release Tecsys Earnings HeadlinesTecsys' (TSE:TCS) investors will be pleased with their splendid 109% return over the last five yearsApril 23, 2025 | finance.yahoo.comTecsys' (TSE:TCS) Solid Earnings Are Supported By Other Strong FactorsMarch 13, 2025 | finance.yahoo.comTrump’s treachery Trump’s Final Reset Inside the shocking plot to re-engineer America’s financial system…and why you need to move your money now.April 28, 2025 | Porter & Company (Ad)Tecsys Reports Financial Results for the Third Quarter of Fiscal 2025March 7, 2025 | theglobeandmail.comTecsys Inc. (TCYSF) Q3 2025 Earnings Call TranscriptMarch 7, 2025 | seekingalpha.comStifel Nicolaus Sticks to Its Buy Rating for TECSYS Inc. 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There are 8 speakers on the call. Operator00:00:00Good morning, everyone. Welcome to Texas 4th Quarter and Fiscal Year 2024 Results Conference Call. Please note that the complete annual and 4th quarter report, including MD and A and financial statements, were filed on SEDAR Plus after market closed yesterday. All dollar amounts are expressed in Canadian currency and are prepared in accordance with International Financial Reporting Standards. The company has added a companion presentation to today's call, which is available on their website at www.texas. Operator00:00:32Com/investors. Some of the statements in this conference call, including the question and answer period, may include forward looking statements that are based on management's beliefs and assumptions. Actual results may differ materially from such statements. I would like to remind everyone that this call is being recorded on Friday, June 28, 2024 at 8:30 am Eastern Time. I would now like to turn the conference over to Mr. Operator00:01:00Peter Burton, Chief Executive Officer at Texas. Please go ahead, sir. Speaker 100:01:08Good morning. Joining me today is Mark Feltler, our Chief Financial Feltler, our Chief Financial Officer. We appreciate you joining us for today's call. As most of you have likely seen in the results issued last night, fiscal 2024 has been an outstanding year for our organization, marked by significant achievements and strong organic growth. Our year over year SaaS revenue is up 39% and our RPO continues to grow, up 43% over last year. Speaker 100:01:36Our momentum continues across the board with emerging opportunities in new marketplaces and a clear path for sustained performance. Our vision for growth is sharper than ever, supported by investment in technology and an obsession with customer success. I'd like to take a moment to summarize the key events of our Q4 and full year results for fiscal 'twenty 4. Mark will then walk us through the financial results in more detail. And finally, I'll comment on our outlook followed by a Q and A session. Speaker 100:02:04If you're following along in the companion deck, I'll be speaking to Slide 3. Q4 has been a fantastic capstone for the fiscal year as we continue to break our own records. We achieved the highest quarterly revenue in our company's history. We achieved the highest SaaS bookings in our company's history, including migrations and expansions across verticals, and we welcome 2 new healthcare IDNs. Our bookings this quarter were up 108% over last year and 37% higher than our best quarter ever. Speaker 100:02:35While we hardly expect this to be the new run rate, we're very happy with this high watermark in quarterly bookings, which brings our fiscal year bookings to a 13% increase year over year. On to RPO, due to strong bookings as well as extensions and renewals in fiscal 2024, our SaaS RPO is growing at a healthy clip, up 43% to $197, 000, 000 compared to the same time last year. Just thinking about that a bit, that means that over the last few years, we have built a backlog of SaaS that has something like 130, 000, 000 dollars of contracted but unrecognized gross margin contribution that will flow through in the years ahead. That is pretty exciting stuff. In terms of milestones, a year ago, we announced that we crossed the 50% threshold of our recurring revenue being SaaS revenue. Speaker 100:03:25A year later, we're now looking at SaaS revenue representing 64% of our recurring revenue. It's worth mentioning that our positive momentum and growing SaaS customer base is underpinned by very robust gross and net retention levels. We are cementing our position as the system of choice for organizations grappling with supply chain complexity. From the Texas Children's Hospital, the largest pediatric facility in the United States, to Baptist Health, a major health system embarking on a consolidated pharmacy service center and from Truepill, the pioneering digital pharmacy provider to Roche, which I mentioned in a previous call, we are adding top tier organizations to our customer list that recognize the value that Texas delivers. This value is reinforced by organizations like Nissan, Intermountain Health and Mayo Clinic, who are sharing their experiences in panels and presentations like those at our user conference last September as well as at regional workshops through the year or in industry publications like Becker's Health Care and Fortune. Speaker 100:04:29With this customer growth comes an expanding white space opportunity. In healthcare, this is especially significant because we often enter an account in a single department or with 1 solution. As we prove out the value of that solution, our end to end health care offering now gives us a lot of flexibility into how we can penetrate further into each account. Earlier this year, we gained traction around the CPSC or Consolidated Pharmacy Service Center model, essentially replicating the successful that we brought to a health systems med surg supply chain and adapting it for the pharmacy, which with engagements at St. Luke's, Parkview Health and Baptist Health, we're proving out the model and significantly increasing the white space in our existing base and the total addressable market within an industry where we already have a solid foothold. Speaker 100:05:18We seem to be again emerging as the market leader in the CPSC space, and we're very quickly securing wins with major IDNs. We're also continuing to build and strengthen our partner ecosystem throughout this fiscal year. This effort is proven valuable with 26% of our deals and half of our new logos being partner influenced. As part of our partner program, we became the only WMS provider to achieve AWS supply chain competency in 3 categories, which was announced in January. As previously discussed, we initiated a major restructuring in the 4th quarter to boost long term profitability. Speaker 100:05:56I'm pleased to confirm that the end results came out fairly closely with what we had anticipated. Our expectations regarding the impact on our run rate and the cost we expected to incur were quite accurate. This restructuring was an important step for us as we continue to increase our investment in areas of growth. As we continue to invest in the products we sell in the manner in which we sell them, Texas has proven to be among the best cloud based solutions available in the markets we serve. The steady growth we have experienced affirms our vision and strategy for shareholder value. Speaker 100:06:31Mark will now provide further details on our Q4 and the full fiscal financial year results as well as financial guidance on several key metrics. Speaker 200:06:42Thank you, Peter. We're very pleased with the strong performance in our Q4 ended April 30, 2024. I'll start with Slide 4 and focused first on SaaS. SaaS revenue continues to be the key driver for our growth and we believe the key driver for value creation. SaaS revenue growth is driving our recurring revenue and during the 4th quarter, SaaS revenue growth was 27% compared to the same quarter last year, reaching 14, 200, 000 The big news, as Peter mentioned previously, is our record setting $8, 000, 000 of SaaS bookings in Q4. Speaker 200:07:20Our higher growth SaaS revenue is now poised to overtake professional services revenue as our largest single source of revenue, and we expect this to continue to play out in fiscal 2025 and beyond. Total revenue for the quarter was a record $44, 000, 000 that's 7% higher than the same period last year. On a constant currency basis, total revenue growth was 5%. Professional services revenue for the Q4 was $14, 400, 000 That was down 2% from $14, 600, 000 reported for the same quarter last year, but up 11% on a sequential basis from Q3. Professional service backlog continues to be strong at $32, 100, 000 as of April 30, 2024. Speaker 200:08:13For the Q4 of fiscal 2024, gross margin was 47% compared to 45% in the same period last year. Combined SaaS, maintenance, support and professional services gross profit margin for the 3 months ended April 30, 2024 was 50%. That's up compared to 47% in the same period of fiscal 2023. SaaS margin expansion was the driver and we're pleased to report that this continues to track as planned. Net profit in the quarter was relatively flat at $259, 000 compared to $446, 000 in the same quarter last year. Speaker 200:08:58Net profit in the quarter was negatively impacted by $2, 100, 000 restructuring charges and this was broadly offset by positive comparable impact from foreign exchange and income tax attribute recognition in the current quarter. Adjusted EBITDA was $2, 800, 000 in Q4 of fiscal 'twenty 4 compared to $2, 400, 000 in the same period last year. I'm going to turn now briefly to our results for the full fiscal year 2024 and move to Slide 5, you're following along in the deck. Our total revenue was $171, 200, 000 that's up 12% compared to $152, 400, 000 in the same period last year and up 9% on a constant currency basis. SaaS revenue for fiscal 'twenty 4 was $51, 900, 000 up 39% from $37, 500, 000 dollars in the same period last year, and that was up 35% on a constant currency basis. Speaker 200:10:04Our adjusted EBITDA for fiscal 'twenty 4 was $9, 600, 000 compared to $9, 500, 000 in the same period last year. Basic and fully diluted earnings per share were $0.13 in fiscal 'twenty 4 compared to $0.14 in fiscal 'twenty 3. We ended Q4 fiscal 'twenty 4 with a solid balance sheet position. We had cash and short term investments of $35, 600, 000 and no debt. Operating activities provided $4, 900, 000 of cash in fiscal 'twenty 4 and during the year we used $7, 200, 000 to repurchase shares under our NCIB. Speaker 200:10:48Additionally, the Board yesterday approved a quarterly dividend of $0.08 a share. With respect to financial guidance and now moving to Slide 6, we're providing full year 'twenty 5 guidance as follows: number 1, total revenue growth between 7% 9% number 2, SaaS revenue growth between 30% 32% and finally, adjusted EBITDA margin between 8% 9%. Additionally, we're providing adjusted EBITDA margin guidance for fiscal 2026 of between 10% 11%. I'll now turn the call back to Peter to provide some outlook comments. Speaker 100:11:39Thanks, Mark. Texas performance in fiscal 2024 started out strong and that momentum continued through the year. We have a solid balance sheet and continue to have a robust backlog and sales pipeline. We are seeing widespread buyer intent across our target markets and the opportunity cycles are being accelerated by a highly capable sales team with the tools, the talent and the partners to capitalize on a market that's ready to invest. As I mentioned earlier, our expanded healthcare sector offering and growing footprint gives us confidence that the healthcare market will continue to be an important growth engine for us. Speaker 100:12:15We have an exciting value proposition within that pharmacy space with multiple proof points and a growing acceptance of the consolidated service model for pharmacy distribution. Over and above our IDN business with the added pharmacy white space, we are seeing growth signals in our medical and pharma distribution sector, driven partially by legislative pressure from the U. S. Drug Supply Chain Security Act, DSCSA, which requires traceability to Texas solutions enable. We are also well positioned to pursue new marketplaces and geographies within the converging distribution space, and we will continue to invest to expand our overall growth. Speaker 100:12:56Our distribution business represents a massive market opportunity, and we're still only scratching the surface. We continue to hone our sweet spot there and carve out our share of that pie with rising market indicators driven by fundamental change to the supply chain industry. Changes spurred by aging legacy systems, digital adoption and a realization that heightens consumer expectations are here to stay. We are pleased that our fiscal 2024 results continue to demonstrate our dominance in key markets and emerging opportunity in growth markets. The wave of change and system modernization and supply chain management is underway and businesses are actively investing in the tools that they need to adapt to consumer expectations. Speaker 100:13:37As we look ahead to fiscal 2025, we are confident in our ability to seize market opportunity and presence in this rapidly growing market in North America and expand our footprint in European markets. And so in summary, I want to share with analysts and investors some key themes for fiscal 'twenty 5. First, an emphasis on continuing to refine our SaaS software, so it is easy to use and upgrade and even easier to recommend to peers. 2nd, a continued strategic partnership approach characterized by deeper and stronger alliances. This helps us tap into new opportunities and fuels our scalability around the world. Speaker 100:14:183rd, an emphasis on advancing and deepening our healthcare vertical covering both MedSurg and Pharma as we continue to solidify our position as the go to provider for healthcare supply chain solutions. 4th, a continuous evolution of our distribution and omnichannel business platform that takes advantage of innovative technologies and the power of data. As a final point, I'd like to stress across our markets, we will prioritize customer satisfaction and success. We have long stood by the philosophy of customers for life. A big part of that formula is to deliver value quickly, stay connected and expand on the value delivered. Speaker 100:14:55With that, we'll open up the call for questions. Thank you. Operator00:15:00Thank you, sir. Our first question comes from the line of Andy Wen from Raymond James. Go ahead please. Speaker 300:15:38Hi, thank you for taking my questions. So your fiscal 'twenty 5 guidance implies slower growth on the top line. Maybe you could share some more color on what you're seeing in the market? Speaker 400:15:52Yes. Peter, you want to take that Speaker 200:15:55or you want me to add? Speaker 100:15:57Yes, sure. I can comment. Maybe you can add some detail. But yes, I mean, overall, it's really just a question of as our business continues to transition with increasing partnerships and alliances and organizations like whether it be Deloitte or KPMG or RISE NOW or Avalon, they're assisting us with a lot of implementation. So what you end up with here is a rapidly growing SaaS revenue line, but which currently represents, let's round it off here, a third of our revenues. Speaker 100:16:30So when SaaS represents a third of our revenues and it's growing in the 30% to 40% range, but most of the rest of the business is the trend lines are close to flat. That's what you end up with. You kind of end up with a 10 ish kind of percent growth range. So that's what we're seeing. And I think as the business continues this transition as SaaS revenues become a higher and higher percentage of the total, that top line growth revenue is going to rise, break back up again along with the SaaS. Speaker 100:17:00This is probably our last year of transition out of the license model. I mean, maybe you could say last year was, but it's the fact is license revenue is now sort of virtually gone. So because of that, your SaaS revenue comes is well finally able to start really shining through, no longer being dampened by declining license fees, but it is still has to get averaged into what is much, much slower growth professional services and virtually flat hardware sales. Speaker 200:17:36Yes. Andy, I would just add to that that if you hardware for us in 'twenty 4 was a pretty you see those growth numbers. I mean it was up 21% year on year. And if you take that sort of hardware growth out of it out of the numbers, that 24% revenue growth was around 11%. And we expect in that 7% to 9% if you take hardware out of that, we expect that growth rate to actually be higher than 11%. Speaker 200:18:09So we are actually seeing accelerating growth here if you strip out the impact to hardware. We entered fiscal 'twenty 4 with a very robust backlog of hardware that kind of built up during the COVID years actually where it was kind of hard to get hold of some hardware stuff. That stuff delivered out beyond proportionally in fiscal 2024. So we actually expect hardware to moderate in 2025 back down to levels that are closer to what we saw in fiscal 'twenty 3. Speaker 300:18:46Got you. That makes sense. My next question would be about the win rate in your complex distributions. Like do you see that changing? Is it getting better? Speaker 100:18:59I mean, it's holding fairly steady. I mean, part of it is that that's a market where there's it began to get really active about a year ago, but we're really only starting to see deals go to signature now. And so we continue to win our fair share there. I mean historically we've won in the sort of 30% to 40% range of those yields. We're trying to nudge that up. Speaker 100:19:24We're trying to get that up closer to 50%. There's quarters where it sags below 30%. There's quarters where it does get up higher. But the good news for us is that that market is actually starting to move and sign some deals. So we were pretty pleased with the performance of that particular market in fiscal 'twenty 4, and we've got great hope for it in fiscal 'twenty 5. Speaker 300:19:48Perfect. And maybe on the pipeline complex versus healthcare, what's the percentage mix between those? Can you hear me? Speaker 100:20:07Sir, I lost you there for a bit. You seem to be back now. Speaker 300:20:11Yes, yes, sorry. So I was asking, how much is the pipeline mix between complex distributions and healthcare? Speaker 100:20:19Mark, what would it be right now? It's got to be close to fifty-fifty, right? Like the thing is our win rate is so much higher in healthcare that if you've got the same amount, technically of the same amount in each pipeline, you're still likely to book twice as much healthcare as complex distribution. But I think in terms of total we look at the 12 month pipeline and they're pretty close at this point. Speaker 400:20:48Yes. Got you. Speaker 300:20:52Yes, and then sorry, so I was just about to ask, so on the revenue side of view, point of view is probably roughly the same too, right? Speaker 200:21:02Well, actually our revenue mix is it's an interesting question you asked there, Andy. I mean, this is sort of the first point where our healthcare business is actually just surpassed the complex distribution business in terms of annual recurring revenue. So it's still a pretty even split there. You might know that our legacy business was very much more directed at complex distribution and more recently the healthcare sector has been growing more rapidly and that's finally resulted only recently in healthcare surpassing complex distribution as the bigger ARR contributor, but just barely. Speaker 500:21:47Got you. Operator00:21:53Our next question comes from the line of Amir Azat from Vinton Financial. Go ahead please. Speaker 400:22:01Good morning, Pierre and Mark. Thanks for taking my questions. Just to close the loop on hardware for 2025, did I understand correctly that we should be looking for flattish hardware in 2025 as opposed to lower year on year from what was obviously a huge 2024? Speaker 200:22:20Yes, I would say right now our expectations are, I think 'twenty 4 was a bump up and I think 'twenty 5, you should think more about 2023 sort of levels. Speaker 400:22:33Okay. Okay. Okay. Got it. Then maybe if we double click on SaaS revenues. Speaker 400:22:41So as far as like your SaaS backlog and RPO are concerned, they seem to be growing at a higher growth metric relative to what you're guiding for SaaS growth in 2025, 30% is still impressive. But I just wonder I'm wondering like are you guys capacity constrained, be it internally or through your channel partners on delivery? Or how do I reconcile that like higher sort of staff backlog and RPO number 2, what's your guiding? Speaker 200:23:13Well, RPO, I mean, the big delta there is RPO is a multiyear Yes. Is a multiyear calculation, of course. So renewals and renewal timing, which really for us started to kick in. Actually Q4 was really almost 1 of the first times where we had some pretty material renewals that actually impacted RPO in some meaningful kind of way. So that started to that drove up the RPO growth number. Speaker 200:23:46The other thing is we've got some customers that are going with longer term contracts. We usually talk about 3 to 5 year contracts. And we saw in that quarter a disproportionate amount on the high side of that and some even higher than that in terms of contract term, which is great because it shows that people are confident enough in us in our platforms to sign up for longer term contracts. The positive side of that is increasing RPO and in that scenario would increase faster than annual revenue growth. Speaker 400:24:25Understood. That's very clear. Then can you just refresh us on the accounting? Is there like any difference in the margin or the gross margin profile of renewals versus like the initial like contract? Speaker 200:24:43Not really. I mean, a like for like renewal on the platform, we're going to get an uptick most typically when we do a renewal, we're going to get a CPI or CPI plus kind of uptick. So that will be maybe a little bit accretive margin, but every year our costs go up as well. We have merit, we have salary increase and all the rest of it. So there's not I would say there's not in a like for like deal, there's not necessarily much margin expansion. Speaker 200:25:18What typically happens though, Aymer, is that that's the time where when people are looking at that and looking at the renewal period and ending up for the next sort of contract period, that's an awesome selling opportunity for us. So that's typically when we're in there working hard to add additional modules and a very a very significant expansion impact on SaaS margins when we add on new modules to existing customers. Speaker 400:25:55Fantastic. Well, maybe 1 last 1, like speaking of like expansions, when thinking about your guidance on SaaS next year, can you give us a high level like the splits of how much of the growth is like e logos versus expansions and migrations? I believe like less migrations now, but Speaker 200:26:17Yes, yes, yes. I think that's right. I think that's what we expect to, Aymer, especially on the healthcare side when since we've converted a large quantity of those healthcare customers are already on the SaaS platform. There's still a lot of opportunity for migrations in complex distribution. But that said, we do see that we do expect that migration componentry to slow down a little bit. Speaker 200:26:48In terms of the kind of the new versus base splits, I mean, if we look what happens historically, it runs from sort of 20% in the 20% to the mid-40s and even 50% is new business in any given quarter. If you average that out over time, it's sort of in the high 20s around 30%. And that's kind of how we model this going forward. If we look at our pipeline and the opportunities that are in the pipeline, I would say there's more new logo business in the pipeline now than there has been in the past if we looked at the same time last year. However, our win rates on those expansion deals in our pipeline and the sales cycles on those expansion deals are much, much, much quicker. Speaker 200:27:48So that we've got a lot of white space in that base. As you know, we're only about we're in the 20% level of penetration in our white space in healthcare. So there's still a lot of opportunity for us there. Speaker 400:28:03Fantastic. And just 1 last 1. When you're saying like that 20% penetration ID, you could still like upsell or expand like 80% of your Yes, exactly. Okay. I appreciate that. Speaker 400:28:20I'll pass the line. Speaker 100:28:23Thanks, Eric. Operator00:28:25Our next question comes from the line of Gavin Fairweather from Cormark Securities. Please go ahead. Speaker 600:28:39Yes, SaaS growth guide. Do you guys expect bookings to be more back end weighted? And do you plan to grow bookings in fiscal 'twenty 5? Any color would be helpful on that. Sure. Speaker 200:28:52Could you I think I didn't hear you at the beginning of that. I don't know if it was maybe just on my side. But could you start the front end could you start that question over? Speaker 600:29:01Sure. Just on the SaaS growth guide, you expect bookings to be more back end weighted. If you could just talk about the cadence of bookings in the next year, Speaker 100:29:10that would be helpful. Speaker 600:29:11And then just given that the record year end bookings, can you maybe just talk about any expectations for growth year over year in that bookings figure? That would be helpful. Speaker 300:29:24Yes, I Speaker 100:29:24mean, just 1 overall comment. I mean, first of all, we don't give bookings guidance. It's too hard to give it. Our accounts tend to be that we book tend to be quite large. And as a result, the bookings are just plain lumpy, always have been. Speaker 100:29:40They'll continue to be that. When you're if you look at this past fiscal year where we ended up at sort of $17, 000, 000 and change or whatever in bookings, so you're looking at a call it a $4, 400, 000 whatever $4, 500, 000 average quarter. And meanwhile, you can have 1 booking that's $2, 000, 000 It's just too hard to predict that. At the same time, what I would say is, generally speaking, there is some seasonality to our bookings. Like if you look at our last 10, 15 years, you'll see it holds pretty steady. Speaker 100:30:15Typically, some exceptions, but typically the quarter we're in right now that ends July 31 tends to be a little light in bookings. You clean it out for year end kind of so May is pretty dry. Starts to come back in June, you get some bookings in the early part of July and then vacations kick in and it's hard to get decision makers in a room to sign off on contracts. So that 1 tends to be a little light. Q2 tends to pick up. Speaker 100:30:39That's the quarter ending October 31, usually a little bit stronger. Q3 is which is November, December, January tends to get hit with a lot of vacations again. You got American Thanksgiving in there. You got Christmas in there and so on. Tends to be a little bit slower. Speaker 100:30:54And then Q4 is typically quite strong with sort of no real vacations in there, February, March, April is kind of just work, work, work. So it's a good time to get a lot of business done. So it tends to kind of follow that pattern. And because, of course, we continue to grow, typically, it does tilt towards the back end of the year. But I would also say, Mark, I think you would agree that the fiscal 'twenty 4 that just ended was tilted far more to the back end of the year than we typically see. Speaker 100:31:29And I think the reason for that is what was going on in the healthcare market. I mean calendar 2023, and I think I might have mentioned this last call, calendar 2023 was a year that was characterized by like 10 roughly 10 months of negative cash flow for the average American hospital network. And it was really November before they started turning cash flow positive. So there was a lot of hesitancy in that market during that time period to sort of kick off new projects or accelerate projects, add additional resources to projects. So we saw it in bookings. Speaker 100:32:03We saw it in professional services revenues. We saw it hit a number of places. As they turned back cash flow positive in November, December, and they really stayed cash flow positive since then, We saw a lot more activity starting to happen. So as a result, that really slowed down the first sort of 2 thirds of our year and then it sort of ended with a real kick at the end. So there is some seasonality, but fiscal 'twenty 4 was exceptionally back end weighted. Speaker 200:32:35Yes. I get why you're asking the question there too because it's somehow it's hard if you're thinking about how to model that revenue coming off of new bookings, you're kind of wondering why are you expecting bookings to decline or expecting bookings to grow because you don't necessarily there's enough modeling flux in there to maybe not understand that. But we had 13% bookings growth in fiscal 'twenty 4. And just to be clear, we expect bookings growth in fiscal 'twenty 5. Speaker 600:33:08That's great. Thanks so much guys. And then just given the cuts and the margin guide being unchanged, could you give maybe more color on your investment plans for sales and R and D? Speaker 100:33:22Sure. We have got I mean, as we sort of talked about in the planned part of the script, I mean, we're seeing tremendous opportunity in areas like hospital pharmacies. We're seeing opportunities to invest in AI to dramatically strengthen forecasting, demand planning, inventory optimization. We're seeing opportunities around master file maintenance using artificial intelligence. So we're seeing a lot of opportunities to enhance and strengthen our competitive position in markets that have a huge amount of growth. Speaker 100:33:59So we did the restructuring. We cut costs in a number of areas that we felt that we're sort of already that we're not benefiting from the initial investment. And we've really just shifted that investment over to areas of the business that we think have some pretty exciting growth in the coming quarters years. So we said that at the time. I know a number of people sort of just expected sort of an extra $4, 000, 000 in profit. Speaker 100:34:28But as we stated at the time, it was always our intent to shift the investment to areas of the business with stronger growth potential, and that's what we've done. And we're excited with some of the stuff we're coming out with this year. We've got a release coming out in the fall, what we call our Release 24.2 that is we think it's going to be a pretty compelling market offer. Speaker 600:34:54That's great. Thanks. I'll pass the line. Speaker 200:34:57Thanks. Operator00:35:00Our next question comes from the line of John Hsu from National Bank of Canada. Go ahead please. Speaker 700:35:07Hey, good morning guys. Thanks for taking my question. Good morning John. Peter, how should we understand your comments that 2025, perhaps the last year and the transition out of the license revenue? Should we expect some changes in your sales strategy or just changing revenue mix? Speaker 100:35:26Really just a changing revenue mix. I mean, what continued to drive license revenue was really unmigrated customers, right? So you had customers still running the older on prem software and they were still needing to add another facility or adding more users or that kind of thing. They weren't yet ready to transition to SaaS, so they needed to just pay for more licenses. But as time has gone on, many of our larger accounts have migrated to our SaaS platform. Speaker 100:35:55So they're just off that platform. There's still a few that are left. I mean, in quantity of clients, there's still many that are left. But in terms of sizable clients, there's not that many that are left on the old on prem platform and we have a strategy to sort of continue to migrate those over. So as a result, they're sort of the white space, if you will, in that on prem base is just evaporating. Speaker 100:36:23And it was always our intention. I mean, we never intended to continue to sort of run the license business indefinitely. So it's finally really kicking in. And well, I shouldn't say finally, it's been gradually kicking in over the last few years. But it's now at a point where if I look at this coming year, what's license revenue going to be? Speaker 100:36:43Is it going to be 1%, 1.5%, 3 quarters of percent, I don't know what it's going to be, but it's becoming pretty insignificant in terms of the total number for the year? Speaker 700:36:57Okay. We understand the healthcare market is quite strong, but on the complex distribution front, any planning action to potentially monetize the opportunity in the space given some of the competitors are essentially gone? Speaker 100:37:15Yes. I mean, we're you're talking the general distribution space, right? Yes. That's correct. Yes. Speaker 100:37:22I mean it's something we're actually turning up our marketing spend in that space. We're sharpening our message there. We're looking to add sales capability well. We're looking to add sales capability in Europe as well because we're seeing opportunity over there and opportunity to pursue more global opportunities. So we're doing it cautiously. Speaker 100:37:46I mean the healthcare market is very hot right now. Pharmacy market within healthcare is incredibly active. So we don't want to spread ourselves too thin. But at the same time, that market is heating up. And you're right, the competitive situation has thinned out quite dramatically over the last couple of years. Speaker 100:38:06So we are turning up the investment there. We want to see how it goes. We'll probably give it the first 2 thirds or more of the year to see sort of is it shaping up the way we think it's going to shape up. And if so, I think you can expect to see us turning the investment up higher there towards the end of the year and into next fiscal. Speaker 700:38:27Okay. Thanks for the color. And in terms of the $8, 000, 000 stock bookings, could you maybe help us understand the components of that number? Are they multiple small deals or a few large ones? And also, how much of the bookings are related to new wins versus expansions? Speaker 100:38:46Finally, somebody asking a question about that fantastic booking quarter. Mark, do you want to talk through some of those numbers? Speaker 200:38:56Yes, sure. Yes, John, the mix in that was pretty spread around. We had healthcare contribution in there. We had good solid complex distribution contribution in there. We had some we had several migrations in there. Speaker 200:39:21We had a couple of actually 3 healthcare migrations in that thing, which kind of come back to the other point, what's kind of left in there to migrate after this quarter in healthcare like that was 3 reasonably good size migrations in there, which we absolutely love because these are IDNs that know us. They know our platform as on prem customers and all 3 of these have decided in that quarter to kind of join in and migrate over and continue the journey of expanding their and improving their supply chain management with our platform. So we're pretty excited about that. We had another migration in that quarter that was in complex distribution, which is again fantastic having that sort of vote of confidence from that sector and from an existing customer. On the new business side, Peter mentioned we had a couple of new IDNs, a couple of new healthcare IDNs in there. Speaker 200:40:36Not massive for starts, but kind of normative size ARR wins on those 2, still a bunch of white space for both of those. We had also sort of a 3PL medical supply 3PL related company that was a new logo in that quarter. So it's really kind of all over the place. There we had some nice expansions. We had some expansions that were driven by pharmacy. Speaker 200:41:10Peter mentioned is mentioned and talked in the opening comments about that marketplace and we had some nice wins in that market. So it's kind of it was 1 of those quarters that kind of it was kind of firing on all cylinders. I would say there was more from a dollar basis, there was definitely more new definitely more base business in there. I mentioned all those migrations. So there was definitely more kind of base business and expansion business coming out of that in dollar terms than new logos, but we're happy to see the new logos from across both those verticals. Speaker 700:41:52Okay. That's great color. And Mark, when you say migration, are they migrating from competitors or migrating from legacy platforms? Speaker 200:42:00Yes, good question. I was using that term in the latter sense, meaning on prem customers migrating to our SaaS platform. Speaker 700:42:09Okay. Thank you so much. I'll pass the line. Speaker 200:42:13Thanks, Operator00:42:23Our next question comes from the line of Suthan Sukumar from Stifel. Go ahead please. Speaker 500:42:33Good morning, gents. Good morning. So our first question is 1 of the touch on win rates. It's good to hear that you guys are seeing your win rates sustained with potential for that to improve. Can you speak a little bit about what pricing power you're seeing in the market today and what trends you're also seeing from a contract average contract value basis on all the net new business in your pipeline? Speaker 100:43:05Yes. Let me just comment on pricing power and then Mark can about average contract size. I mean, from a pricing standpoint, we are seeing to divide the markets in my comments. So on the healthcare side, we're seeing a very good pricing power, partly because the ROI is so clearly definable. We go into a typical hospital situation. Speaker 100:43:26We can do a high level analysis with them to show them what their return on investment is going to be, and that return on investment is very strong. We increased our prices by about 30% approximately a year ago. We are waiting to see sort of how that went over and was similar discount sort of similar discount rates to prior year even though we increased the prices by 30%. So and it's because again it's a proven solution with a strong ROI, it's easy to justify that pricing. The general distribution market is more it is more competitive. Speaker 100:44:08You're typically replacing existing systems. So the ROI is often harder to sort of nail down in concrete terms. Usually these systems are being replaced because they have to be replaced. They've literally just aged out or they're not secured anymore. They're not coping with current business needs. Speaker 100:44:29So there is some ROI, but it's not quite as black and white. And there's more competition in that space. That said, the average price of a user, I would say, has not really moved other than sort of inflationary adjustment in over the last 4 to 5 years. It's actually held pretty steady. And if you compare us, our price per seat that we're able to get is very similar to what Oracle is charging and SAP is charging and Manhattan and other significant players in supply chain. Speaker 200:45:06And in terms of contract size there, the average contract size, we usually think about that in the context of just the SaaS ARR componentry there. So that's how we kind of track that number and talk about it internally. And it's a bit of a tale of 2 different sizes depending on which vertical we're in. There's big ranges in both verticals. I mean Peter mentioned 2, 000, 000 ARR booking deals. Speaker 200:45:39There's 2, 000, 000 plus deals out there on the large size. And on the smaller side, there's sort of sub 200, 000 ARR deals. And so if I separate the broad averages between those 2 markets, healthcare's average ARR is somewhere at around $600, 000 again with a big broad range and distribution retail is a little bit lower than that about 300, 000 to 400, 000 average ARR. Speaker 500:46:15Okay. Great. Thanks. That's helpful. The second question I had was more on the expansion motion that you guys have in play here. Speaker 500:46:29What are some of the levers that you have here when you are going through these expansion conversations or renewals with existing customers? Is there a larger is there an opportunity here to capture more value with migrations? And what do expansions typically look like for you guys? Speaker 100:46:56I mean, across the 2 markets, first of all, the general distribution market, it's pretty straightforward. Expansions are either if you look at our order management platform for direct to consumer, expansions typically seem to evolve in new countries. They may have already put France and Germany on the platform and now they're going to add the Middle East or they're going to add some other area. They may have already been in the U. S. Speaker 100:47:20And they're expanding somewhere else. In the in spicing execution, it tends to be additional facilities. We've got, for instance, electrical distributors that every quarter or 2 add another distribution center onto the platform. And so that's the expansion there. In the healthcare market, it tends to be a whole new area of the hospital. Speaker 100:47:43Sometimes it's an additional hospital building they may have started with. They've got 18 hospitals they may have started with doing general supplies in 6 of the hospitals and now they're circling back to the other 12. But very often, it's a complete new initiative for a whole new area of the hospitals business. Most recently, of course, as we've discussed, it's been pharmacy. A lot of additional opportunities in pharmacy to manage the whole pharmacy supply chain from forecasting and demand planning right through to patient bedside with 340B price management and Drug Supply Chain Security Act compliance and so on. Speaker 100:48:22So that is what they're doing there in many cases, they're moving to individual patient dosages being shipped directly from a central pharma facility. So rather than sort of a patient checked into a hospital and the patient's in for, they think it, let's say, a week, So he arrives on a Monday, and it used to be the pharmacy could send out to that ward enough drugs for that patient for the week. Will then on he arrives on Monday, he checks out on Wednesday instead of being there for a week. Well, now there's 5 days worth of drugs left over out of that department. They pretty much never get cycled back into Central. Speaker 100:48:59I mean depending on how they've been handled and where they've been stored, you might not be able even be allowed to cycle them back in. So that drug is just waste, whereas in a central pharmacy distribution model on our platform, the drugs are literally being sent out every day for patients every day with individual dosages for those patients. So you virtually eliminate that kind of waste. You know where the drugs are throughout the supply chain. And with the cost of drugs these days, that is worth, in many cases, tens of 1, 000, 000 or more to a hospital level, so on an annual basis. Speaker 100:49:38So that is an area that is probably the hottest white space for us right now. Speaker 200:49:45And Suthan, I would add to that that we scale that market. There's 373 IDNs in the U. S. Market that are target. They're over $1, 000, 000, 000 in a patient revenue. Speaker 200:50:01And we sort of scale that market. I think conservatively at over $3, 000, 000 on average of ARR opportunity per network. So the market is massive. And I just mentioned our average deal size in that market, big variety, but an average of $600, 000, 000 So if you just think about that $600, 000, 000 deal, we're trying to penetrate into an opportunity that's bigger than $3, 000, 000 with that IDN. So for new deals that we're signing when we're creating that additional logo, we're creating a 5x to 6x opportunity on white space expansion. Speaker 500:50:46Okay, great. No, that makes sense. And last question for me guys, just on the legacy maintenance and support line. How are you guys thinking about the erosion in that revenue line as you start to migrate the long tail of customers still on premise model? Speaker 200:51:07Yes. It's a good question. We talked a little bit before about that revenue growth guidance that we provided and why is it when SaaS is growing so quickly, why is that overall revenue growth line much more moderated? And I talked a little bit about hardware and the impact that has on that number. But the point you're bringing up is another 1 like that number has been sort of flattish this year. Speaker 200:51:36And we expect and we've been talking about it sort of declining as more migrations kick in and the payment of maintenance supports ends and turns into a SaaS only revenue stream, Like we're in the process of that, still expecting that that line is not going to grow. It's it's probably going to decline we're probably going to be declining on maintenance and support. I mean, we said that last year too that that was our expectation. It didn't quite happen. It's kind of being supported by some of our other non SaaS annual recurring revenue on in particular on hardware maintenance that comes into that maintenance and support line. Speaker 200:52:23But we do expect that line to be flat to declining in fiscal 'twenty 5. Speaker 500:52:31Okay. Thank you. Thank you, guys. I'll pass it on. Speaker 300:52:36Thank you. Speaker 200:52:38Thanks. Operator00:52:40Thank you. There are no further questions at this time. I'd now like to turn the call back over to Mr. Burton for final closing remarks. Speaker 100:52:48Great. Well, thank you, everyone. Thanks for spending time with us today. We're delighted with how we ended fiscal 'twenty 4, and next call will be both Q1 of fiscal 'twenty 5. So we'll talk to you in early September. Speaker 100:53:01In the meantime, if you have any questions, don't hesitate to reach out to Mark or myself. We're always happy to have further dialogue. Thanks. Have a great day. Speaker 200:53:10Thanks. Operator00:53:11Thank you, sir. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a lovely day.Read morePowered by