Q4 2019 Earnings Call
Greetings and welcome to model in fourth quarter 2019 earnings call.
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Question answer session will follow the formal presentation.
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I'd now like to try to conference over to your host today, David Barden Chief Financial Officer.
Thank you Sir you may begin.
Welcome to the earnings calls for model and fourth quarter in fiscal year 2019, which ended on September Thirtyth 29 team. This is David border model N's, Chief Financial Officer, and with me on the call today is Jason blessing Borderlands, Chief Executive Officer.
Our earnings press release was issued after close of market and is posted on our website, where this call is being webcast.
Primary purpose of today's call is to provide you information regarding our fourth quarter in fiscal year 2019 performance.
And our financial outlook for our first quarter in full year fiscal 2020.
Commentary made on this call may include forward looking statements. These forward looking statements are based on management's current views and expectations as of today and should not be relied upon as representing our views as of any subsequent date, we disclaim any obligation to update any forward looking statements or outlook actual results may differ much.
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Please refer to the risk factors in our most recent Form 10-Q filed with the FCC.
In addition, during today's call we will discuss non-GAAP financial measures. These non-GAAP financial measures should be considered in addition to you know it as a substitute for or in isolation from GAAP results.
Reconciliations of the non-GAAP metrics to the nearest GAAP metrics are included in the earnings release issued today, which is available on our website.
Courage you to visit our Investor Relations Web site at Investor Day model and dotcom to access our fourth quarter fiscal year 2019 press release periodic FCC reports and a webcast replay of this call.
Finally, unless otherwise stated all financial comparisons in this call will be to our results in fiscal year 2018.
With that let me turn the call over to Jason.
Thank you David and good afternoon, everyone. Thank you for joining us today.
I'm pleased to report another well executed corridor with results ahead of our guidance.
Total revenue for the quarter was 36.6 million and adjusted EBITDA was 5.1 million.
Our Q4 results punctuate, an outstanding conclusion to fiscal year 2019.
The impact of our strategic focus is having a material impact on the financial performance of the company and I'm very excited about the momentum we are building.
I'm proud of the importance the model N team has placed on delivering strong results over the past year and I'd also like the thing our customers for their continued strong partnership.
I believe we're still in the early days of realizing our potential as a vertical SaaS company.
Over the last year, we set the cornerstone for executing on our long term strategy by focusing on our two core vertical markets life Sciences and high Tech.
In these large underpenetrated markets, we have a significant market opportunity a very favorable competitive position deep domain expertise and mission critical products.
In order to capitalize on this opportunity we made several key adjustments to the company just over a year ago.
First on our go to market team, we deployed our field resources into Hunter and farmer teams to align around the distinct selling motion of each opportunity.
We also built a customer success function something vital to the SaaS business model and the center of excellence designed to help our on premise customers plan for their transition to our cloud.
Second we simplified the delivery model for our customers with more template ties to implementations.
And finally throughout 2019, we bolstered the strength of the model N team by adding executives with proven track records from leading enterprise SaaS companies.
I am confident these changes have put the company on a path to drive profitable growth over the next several years.
We saw several examples of our focused strategy positively impacting our financial results in 2019, and there were a number of highlights in Q4.
For example, a longtime customer and multibillion dollar medical device leader selected model N to help power, it's multiyear corporate strategy.
The strategy covers a range of initiatives from maintaining category leadership to entering new markets to building new capabilities, all leveraging the power and scale of our cloud.
Model N's products directly supported each of the strategic imperatives and this was a critical part of the final executive approval, which I witnessed firsthand.
This win was a direct result of our focus and expertise in life Sciences, our feature rich product and it was nurtured over the last year by our newly created customer success team.
Also in life Sciences this quarter, a top 10 global biopharmaceutical company selected model N to support the integration of several acquisitions into a single global company.
The customer needed a partner who offered a platform that could quickly adapt to the changing commercial and regulatory landscape and could help accelerate its strategic transformation plans.
After evaluating all options the customer determine that only model an offer the product industry expertise and resources to support its growth plans and its goal of providing transformative health care globally.
These key wins illustrate the strength of our life sciences business and our commitment to customer success.
We still have a lot of opportunity to drive significant growth in life Sciences. As we look ahead by expanding within our existing customer base and by adding new logos.
Our strategic focus is also resonating well in the high tech vertical as evidenced by a healthy mix of customer base expansions and significant new logo activity in 2019.
Specifically in Q4, a leading global memory and storage solutions provider expanded its model N footprint, adding rebates market development Fund management and channel data management, which eliminated the need for a number of point solutions.
Our platform will provide full visibility into channel operations, including individual channel revenue profitability and real time inventory levels.
This level of insight will enable the management team to respond to dynamic market conditions in order to maximize revenue and profitability by channel.
I continue to spend a significant amount of time on the road with our customers and partners I would like to share some of the themes that I've heard during recent travels.
While our financial results demonstrate that our strategy is working specific customer feedback provides great insight on the potential of model and over the next few years.
The first theme is about strengthening relationships and building trust attributes that are cornerstones of a great software company.
I hear from our customers that they've already felt the impact of our focus through more consistent account management and engagement with our recently built customer success function.
Our customers operate in complex markets and value their relationship with model N's domain experts, who help them use our technology to enable their corporate strategy and drive profitable growth.
Building trust with customers and consistently adding value is a journey, but I am proud of the progress. We've made this year and this is one area that will be relentless about enhancing overtime.
The second key theme and all of my discussions is the importance of our customers moving to the cloud.
One thing I noticed when I started at model N is that as a company we were not doing a good job explaining to our existing on premise customers the value and approach of transitioning to our cloud.
As you can imagine the infrastructure any leading pharma company this complex.
As I previously mentioned last year, we created a SaaS center of excellence that included some of our best functional and technical experts to address this challenge.
Recently I was in Europe , having dinner with the global CIO at one of our top five pharma customers. He specifically cited the importance of the SaaS center of excellence in helping his team build a three year roadmap to implement more model in products and move all applications to our cloud.
This is a great example of where focus and trust are delivering results.
And finally I'm struck by how dynamic our customers end markets are.
M&A is very active in both life Sciences and high Tech.
And our life sciences customers are dealing with an unprecedented level of regulatory change.
There are currently multiple proposals in the U.S. on how to streamline the cost of health care, while improving patient outcomes.
In Europe , where patient outcomes have been the driving factor in care. There is now an increasing focus on cost as populations age.
Some countries in Europe are even piloting the rebate based system that we use in the U.S. as a way to incent more efficient distribution.
The important point here is that our customers are dealing with very complex business environment and they see model and as one of their top strategic technology partners to solve these issues and drive growth and profitability.
I'll end today by sharing something that I said at our Q3 company meeting.
Like most Ceos I want our team to celebrate success, but never be satisfied always be striving to be better.
At our Q3 company meeting I congratulated everyone on our strong year to date execution and I encourage them to go home and tell their families and their neighbors. How proud they are to work at model land and what great progress we're making.
I, then challenged them to come back to work on Monday, and not be satisfied with anything that we've done so far.
After all we had one more quarter to go and many many opportunities in front of us in 2020 and beyond.
We took nothing for granted in Q4 and I could not be more pleased with our team's performance.
This focus on continue improvement and strong results are important for us as we look forward to 2020 and beyond.
Our results in 2019 demonstrate what is possible when we focus on our key markets and our customer success.
Given this along with our favorable competitive position in the market I believe fiscal year 2020 will represent the beginning of a long period of profitable revenue growth for modeling.
Now I would like to turn the call over to David to elaborate on our financial results and guidance David.
Thank you Jason.
Our results for the fourth quarter in fiscal year, 2019 exceeded our expectations, even more exciting the company strategic focus and the quality of the team's execution is starting to be reflected in our financial results.
I believe modeling is in the very early days of growing in scaling as a vertical fast company positioning us to deliver compelling profitable growth.
Now I'd like to share with you some of the highlights from our fourth quarter and full fiscal year 2019.
As a reminder, our fiscal year 2019 results were impacted by our adoption of 86 physics and the shift of our business model disaster.
Total revenue for the fourth quarter was $36.6 million in above the top end of our guidance range. The outperformance reflects healthy subscription revenue growth, which was $27.4 million professional services revenue was $9.2 million for the quarter.
Profitability was also strong in the quarter and need to was above the top end of our guidance range non-GAAP gross profit for the fourth quarter was $22.6 million or 62% of revenue.
non-GAAP gross margin for subscription revenue was 73% a substantial improvement over the 67% in Q4 fiscal year 2018.
non-GAAP gross margin for professional services was 28%.
non-GAAP operating profit for the period was $4.8 million. It also exceeded the top end of our guidance. This aligns with our commitment and focus on generating profitable growth.
non-GAAP net income in the fourth quarter was $4.2 million.
We produced a non-GAAP net income per share of 12 cents, which was ahead of our guidance of six to 10 cents.
Adjusted EBITDA for the fourth quarter was $5.1 billion, which was well ahead of our guidance of $3.5 million to $4.5 million. This is a direct reflection of our strategy to invest in long term growth, while driving enhanced levels of profitability.
Turning to the balance sheet, we ended the fourth quarter with $60.8 million of cash and cash equivalents, we generated $10.2 million a free cash flow in fiscal year 2019, and continue to strengthen the overall financial profile of the company.
As our free cash flow continues to improve we expect to further reduce our outstanding debt and increase our net cash position.
Turning to our full fiscal year 2019 results.
<unk> revenue was $141.2 million and subscription revenue was $105.2 million.
For the full year non-GAAP gross margin was 58% non-GAAP income from operations for fiscal year 2019 grew to $11.8 million compared to an operating income of $8.7 million in fiscal year 2018.
non-GAAP net income for fiscal year, 2019 was $7.5 million, a meaningful increase from $1.3 million in the prior year.
non-GAAP net income per share for fiscal year 2019 was 22 cents.
Up from four cents in the prior year.
Adjusted EBITDA for fiscal year, 2019 was a profit of $13.1 million compared to a profit of $11.5 million in fiscal year 2018, adjusted EBITDA margin grew by almost 25% or 200 basis points to approximately 9%.
Looking ahead to fiscal year 2020, we're entering the year with healthy visibility.
As discussed on our last earnings call our guidance reflects our new subscription revenue growing at approximately 20% while revenue from our old maintenance subscription contracts continues to decline at a single digit rate consistent with our ongoing shift to sense.
It's also worth noting that the midpoint of our guidance is in line with what we shared on our last call and the top end of our guidance reflects the continued quality of the team's execution, which we saw once again in Q4.
We're also encouraged by the expansion of our gross margin.
We expect our non-GAAP gross margin to increase approximately two points to 60% in the coming year, which aligns with a non-GAAP gross margin for subscription of approximately 72% in a margin of 25% for professional services.
This enhanced level of profitability will allow us to make some targeted additions to our sales and product development organizations, which will help round out the existing teams.
It's also important to note that our profitability guidance factors in some onetime costs associated with migrating the final 20 customers offer older cloud environments.
For full fiscal year 2020, we expect total revenue to range from $152 million to $155 million and total subscription revenue to range from $113 million to $115 million. We expect non-GAAP income from operations in the range of $11 million to $14 million and.
GAAP income per share in the range of 20 to 31 cents based on a fully diluted share count of approximately 35.2 million shares.
Adjusted EBITDA is expected to be in the range of $12 million to $15 million.
Please keep in mind that adjusted EBITDA tends to be seasonally lower in the first half of the fiscal year due to the rollout of our new marketing programs, our user conference and the payroll tax reset and then profitability increases in the second half of the fiscal year.
For the first quarter, we expect total revenue to be in a range of $37 million to $37.4 million and within this we expect total subscription revenue to range from $27.6 million to $28 million. This represents approximately 10% growth at the midpoint.
non-GAAP income from operations is expected to be in the range of $2.9 million to $3.3 million. This would lead to a non-GAAP net income per share of five to seven cents based on a fully diluted share count of approximately 34.3 million shares.
Adjusted EBITDA is expected to be in the range of $3.2 million to $3.6 million, which represents over 15% growth at the midpoint of the range and almost 25% growth at the top end of the range.
I'm incredibly excited about the opportunity in front of US I believe our fourth quarter in fiscal year 2019 results illustrate that our strategy is working well our strategic focus on driving growth from new and existing customers in life Sciences, and Phitek will prove to be the right one and we are well positioned to execute on it.
We're in the very early days as a vertical SaaS company as we continue to execute on our strategy.
And it we will deliver profitable growth in line with our target model and further expand our market leadership.
Thank you for joining todays call now I'll turn the call over to the operator for questions.
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One moment, while we pull for our first question.
Our first question comes from Kodiak Quito with Oppenheimer. Please proceed with your question.
Hey, guys. Congrats on a nice close to the finish of your you fiscal year. A question here on your new recent higher the chief product officer and on the on the Chief revenue Officer, you hired earlier this year. So on the new Chief product Officer, why now what sort of the thought process, there and I guess.
Very high level, how should we how should we be thinking about any changes.
To the overall vision or product road map from here and then on the Chief revenue Officer now that Chris has been in the seat for about a half year or so.
And your at the beginning of your next fiscal year should we anticipate any changes to the go to market strategy or Salesforce line or even sales for capacity any sort of help would be helpful. There and I got one follow up.
Okay, Great. Good question Koji good to talk to you so.
Let me take both of those individually first I'll start with Suresh you know since I, Suresh Con and our new Chief product Officer.
Since I took this job I've committed to our company our customers and our investors that I'm going to do my best to have.
The strongest team on the field.
And.
As I got to know Suresh I really like to his background. He's got a very strong engineering background.
Having started his career as senior member of the technical staff at IB and then Oracle.
He is also very strong operationally and I think is going to be.
Instrumental as we continue to to scale the company.
A couple of the other unique things that stood out about his background that I liked.
As he's got 14, a little over 14 years of life Sciences background.
Working at at various different companies. So he brings a tremendous amount of domain expertise and at Imus and Quintiles in particular, he had some great experience building data products data offerings, and and I really like that about his background as well and I think that can be an opportunity.
For us.
The final thing I would say about Suresh is he is one of the most commercially oriented.
Products leaders that I've met in my non nearly 30 years of enterprise software. So I think he's going to also be very additive to our growth strategy over the next couple of years. It comes in with you know with with a good orientation around that and I think he is also going to be very active in the field, helping Chris slide.
And in the sales team.
Closed deals so.
As has been the case with every one of these changes its been made from a position of strength and.
I really feel like.
Making good on my commitment to continue to improve our overall bench.
From an executive perspective.
In terms of of Chris.
I would say, Chris really slipped in.
Seamlessly to running our sales organization.
I've talked about almost 12 months to the day, we made some changes in our go to market team and how we restructured and how we're organizing and deploying resources and as I as I.
Got to know, Chris and started thinking about him for this role.
He really we had very similar views on on how to.
Better organized and really inflect growth in the company and so I'd say that transition with Chris coming in was about as seamless as it can be and I think even more importantly, Chris is really built the foundation on top of which we can we can continue to.
Vast he has been making some upgrades selectively in sales leadership, he's built out a world class sales operations and enablement function all of which I would say.
Position us well too you know to continue to thoughtfully add capacity in our sales function.
To an extent to drive growth as we exit 2020, but really to set up 2021 and beyond.
And thanks for that and my follow up questions for for Mr. Barter.
Any chance you could provide the ending a mix of.
Maintenance and fast revenue exiting the fourth quarter that'd be helpful. Thank you.
Certainly we have to look a little color over the course of the year. We obviously the mix between the sasson. What we think are both the new subscriptions versus the maintenance continue to to nudge up where we finished last year just for color. We finished at a mix of about 52 to 48 between.
The the Hsas and then the legacy maintenance and where we ended this year, we crossed the 55 and then just just shy of about 58 42.
Thank you.
Just just about 50% sasson, 42% legacy maintenance got it. Thank you for taking my questions and congrats on the great quarter.
Thanks.
Our next question comes from Jackson Ader with JP Morgan. Please proceed with your question.
Great. Thanks, Good evening guys.
My first question absolutely lets just follow up on the on the subscription versus the maintenance mix. So.
I think in the supplemental slide it said there was an implication here for the fourth and first quarter I should say.
Net.
New subscription revenue should be up about 20% and maintenance declining in the mid single digit. So if we if we just look at the 20% growth in new subscription revenue.
How much of that is.
Still coming from on premise transmissions.
And how much is just coming from brand new either in logos or revenue.
Okay, Great question Jackson and.
Thanks for joining us today the growth throughout last year was a lot of it had to do with just this organization around hunting and farming and so I think thats one of the elements that got us really excited and so the preponderance of our growth.
Given the daily ratable model is that it really reflects that idea going after new logos and expanding relationships within the customer base.
As you saw within the press release, there was a fast transition.
We are happy to give a little bit more color on in the quarter, but the bulk of what we've been booking is really just.
What I think of as bookings related to how most asked companies grow.
Yes, Jackson this is Jason if I can just add some color on to that I mean, I've really been been trying to impress this point on investors and analysts throughout the year that you know the vast majority of our growth is coming from signing new logos and expanding footprint within within existing customers, which you would expect because.
Those are the two biggest growth levers that we have and honestly dwarf the SaaS conversion.
Opportunity. So so it is in some respects law of averages you would expect to see that and we have really been focused on on honestly all three of them and seen a nice mix of all three of them contributing to bookings throughout the year.
Great. Okay, well that is helpful. I appreciate the the additional color the follow up for you David I just want to clarify.
One point you made on the professional services gross margin.
We expect thought I think it ticked up to 25% this year.
Okay, and and one of the headwinds on adjusted EBITDA or or.
Or profitability is going to be one time related expenses from migrations. So.
So what are those expenses and where are they going to show up.
But they would show up and professional services, but.
Professional services cost of goods, but.
Any help there would be great.
That's great question. So I think maybe just a gun to build on your question I think what I highlighted in the remarks, where we had about 20 customers on older clouds and.
This is something that we've been working on.
Over the last couple of years of moving moving all customers to answer that one code base that we had mounted on cws, and obviously efficiently and efficiently developing code and obviously keeping keeping customers current on an evergreen code base and and so there are some some costs in professional services there are some.
Costs actually in the on the recurring side just as you can imagine you almost have a customer you're incurring cost and in both new environment than in the old environment, while you're running parallel and getting them to cut over and so that will that will compress margins a little bit and we've given ourselves a little bit a room to work to obviously as you you've kind of.
As you covered US you realize how focused we aren't customer success and so we're making sure that we really tackled as well and we get the job done right.
So those would probably be that all right.
Yes.
Alright, thanks, guys.
Yes.
Our next question comes from Chad Bennett with Craig Hallum. Please proceed with your question.
Chad Your line is life.
Well move on the next question is from Ryan Macdonald with Needham. Please proceed with your question.
Hi, Jason and David I think for taking my questions. I guess, just first on regarding the large med device company announcement and the transition there what should we expect in terms of sort of timeframe on that transition as it's something that we should see similar to the process you took with gilliat and what sort of I guess as you're trying.
To drive these additional customer migrations are you seeing or are expecting to see sort of an uplift on the maintenance line similar to what Youve discussed and pass I believe isn't the two to three times range. Thanks.
Yes, I'll comment on the the project and then let David add some color.
Right I will say the good news here as we're getting more efficient at these and learning as we have now done multiple of them.
Our very first one that we did was that deleted and we wanted to make sure. We took the time and put in the effort to make that first large transition successful and so that was a little over 18 months and now we've got two very large projects that are in flight Biogen and novo.
Biogen will go live here before the end of the calendar year Novo.
In the first of the year.
After the holidays both of those projects have been in the neighborhood of 10 to 12 months and then the one that we talked about on the call today is.
More towards the Novo and Gilliat ilk in terms of size and complexity and that was going to be somewhere around 12 months, plus or minus a month or two but.
Closer to year. So we are we're driving pretty significant efficiencies in these projects.
As we get more and more under our belt.
And that X and then I guess Oh, Yeah. David go ahead.
And just in terms of that your question on the on the book ends and the economics. This particular deal structure fits fits that mold or the other ones and so we continue to see.
That multiplier that framework to be appropriate.
Excellent and and then I guess as terms of a follow up Jason that particularly as your as you're out meeting in discussing or talking to customers quite often I guess two questions on that one as you look at the budget cycles, particularly in a low life Sciences segment given that there are more digital transformation is going on you.
View that sort of the conversations around budgets are moving beyond sort of.
And annual discussion versus more of a two to three year discussion to meet the needs of that transformation and then secondly on product. What are you hearing from customers that perhaps are asking for in the product pipeline and and should we expect some additional investments there with the new chief product officer coming in to sort of meet those needs. Thanks.
Yes, so in terms of the state of affairs and budget.
The simple answer your question is absolutely.
We really have gone through now our top 15, 20 customers and with our customer success function worked very closely with them to build multiyear roadmaps for investment that really aligned behind their corporate strategies and I will tell you. The life Sciences companies that I think are getting a.
Great and be the.
The household names in this industry over the next 10 to 15 years are ones that are thinking in much broader.
Time horizons with their corporate strategy so.
So so the simple answer to that is yes, and I think you know in addition to digital transformation. The other two trends that are.
You know that are that are really driving thoughtful investment now our continued M&A and companies thinking about what categories. They want to dominate and what new markets and geographies they want to get into and then obviously.
The regulatory environment has not slowed down and in the changes and rate of pace there. So.
And the simple Mart answer to that as the end markets I think continue to be to be very robust in terms of what our customers continue to partner with us on in some of the key themes that we're driving from a roadmap perspective, they really fall into.
Three different areas.
The first is just better analytics to drive better decision, making and this kind of comes into forms. One is just around you know what does the ideal deal look like for US based on our history. So we can sign more profitable business and then in particular one of the things it's very important for companies that sell through complex channels is just.
Getting better visibility into to revenue leakage, but you can neatly package that all up into to better analytics. The second area, where we continue to invest and were very closely with customers are around the changing regulatory landscape, but a lot of changes and and new experiments that are being pilot.
But in both.
Europe as well as the U.S.
Markets, which together are the majority of of global pharmaceutical sales.
And then the last area that we've been investing in is is just to make our product easier to implement and and easier to use and administer for us as.
As a cloud provider and so that's come in the form of better testing tools, better tooling and instrumentation in the product better instrumentation tools and you really see this is this this area in particular is really what's enabling SaaS transitions and some of the gross margin improvements.
That you've seen.
And I suspect with Suresh coming aboard there'll be some incremental investment around the edges.
But we do feel like right now on our product organization, we've got it appropriately resourced and.
May look to Opportunistically tuck in some some new skill sets.
Excellent. Thanks, a lot congratulations.
Right.
Our next question comes from Brian Peterson with Raymond James. Please proceed with the question.
Hi, guys, Kevin here on for Brian Thanks for taking my call.
Wanted to follow up on that last point and I just ask about some of the investments you've made surrounding the tool kits and temp lets you mentioned to support customers as they.
Look to move to the cloud can you remind us where you are now with some of those efforts and then maybe related to that can you talk a little bit more about your ESI and partner network.
How you see that contributing now that there are a little more seasoned following some of the recent conversion work.
Yeah, Okay, great Great. Great question are great series of questions. So first of all on the partner side of things you know our partners have been.
Important in driving bookings as well as some of the delivery of our projects and have been very involved in some of the SaaS transitions at that we've done specifically in the last year and so to me that continues to be a strategic opportunity for us we hired a new executive at the company in the first half of.
Actually to be factually, correct, probably near the middle of the fiscal year.
To continue to capitalize and build more momentum and that function.
So I do think that is that continues to be an area of opportunity for us and there is going to be a lot of work out there with that between SaaS transitions, new logos and in some of the regulatory changes that I just talked about so theres a great deal of interest and I think we're well positioned to capitalize on it particularly with some of the rig.
Nude focus internally.
You know in terms of two okay. So I'll give you a couple of specific examples.
That that we've used that you can also start to triangulate in our results.
First of all.
As we started to do more SAS implementations with that have come more standard approaches to configuring and implementing our product and and so we have an express implementation methodology that is now a political to a mid market life Sciences customer.
Honestly, all the way up to some of the larger divisions in global multinationals. That's played an important role in the IND, enabling some of the growth. This year and you know as our services business as kind of been Rightsized.
As we started to do more and more selling like a SaaS company you see that that the SaaS excuse me the professional services dollars or more like one and a half times.
The two times a recurring revenue dollar. So so that's a direct benefit of the emphasis we put on on more efficient implementations.
Second.
Tool or or suite of tools, we have built is around testing.
One of the largest objections to any.
Life Sciences customer in particular to changing a system that handles their regulatory.
Needs is having to get it revalidated by their own internal audit and so we've put a tremendous amount of effort into building and automated test suite that works with our vanilla product that dramatically shrinks test.
Cycles helps customers manage risk and get sign off more quickly from from internal audit.
That's very helpful. Thanks, guys.
Thank you.
Thank you on next question comes from Pat Walravens JMP Securities. Please proceed with your question.
Awesome, Thanks, very much and nice job you guys. So.
Dave I might've missed it and if so forgive me, but did you give the SaaS they are growth.
I did not I didn't I think will include that among the metrics that we publish this time.
Okay.
You want to give it.
Well it so that the metric that we've been using in kind of getting people acquainted with is really just are actually pad around our PEO and so I'd say that ARPU I think just as we've been phasing in metrics I think we've been getting getting people comfortable with that and then.
Obviously, we want to break out the life Sciences in the high Tech. So I think the you know the ARPU for the quarter, which you'll see in the K.
It was a I think a reflection of the bookings pad and what you'll see is that we finished a little bit over a 127 million.
So up about a 24% you just anticipated my second question. Okay. So ARPO was a little over 127.
Right that's correct in the current and and the current portion since I know you guys double click into the current board have though.
Well no that's funded minutes a metric that we've been getting people comfortable using because it's a well I think it's hard to six so six understood. It's a it's a good indicator. So the current portion climbed to just over 64 million up about 11%.
And and Pat This is Jason.
Good afternoon, all at a couple.
It's a color on top of what David said, so implied in the guidance is.
And the results are recurring revenue growing at 20% in bookings continued to grow at a slightly a healthier clip than that.
Right and David how much with the 127 up your up here.
Well, we weren't so six so circles and the adoption of RPR went hand in hand, so we actually didnt have that calculus for a for last year. So I think if you went back to Q3 again are and how our view has been building over the year in Q1 actually it started off it at 80 million.
It has climbed up progressive waste insulin.
Up to the current went to one of the starting next year again, we're going to have year over year comparison, we're in a real nice year over year compares but.
This is our first year of just wrapping up 66.
And so since.
We're probably going all projected do you want to give us any sense for what we should be doing.
With the RPL.
Was that the bookings just over 11% comment Jason.
So I think Jason was just trying to give some healthy flavor in terms of the kind of the bookings continued to be very healthy and that's what's actually feeding that 20%.
New subscription growth that we've talked about and actually included in the investor supplemental.
So I think that was the cold.
And to provide.
Right and just I don't get things rocks, if I read project RPL growing 20% next year would that be right or would that be sort of misinterpreting that situation I.
I'll tell you what why don't we do a little bit more analysis for you before we see.
And I'd, rather give you a good framework on how to outgrow our IPO.
Okay. So it's alright, and then Jane can be was it just wasn't.
Used for from a guidance perspective Thats all.
So I'd, rather give you take a little bit fund.
Publicly release something that level has really good fidelity.
Okay.
A couple of quarters, though we were talking about the whole Trump and rebates prescription pharmaceuticals.
What happened to that I think it died right Ken it come back.
Yes is the the short answer so.
Trump actually decided to abandon that you started to get or his administration started to get some.
Pretty negative feedback on the timing cost it was going to take two to implement the necessary changes from an industry perspective.
But as you might expect particularly in a in an election year. Both parties have now fill that void with competing with competing.
Proposals and I do think something is going to happen in this area over the next 12 to 18 months and interestingly enough I was and I mentioned this in the script, but I was just over in Europe , visiting a bunch of customers and over there, where they're having populations live longer than ever and a health care system that's really.
Juggling to keep up there actually thinking about implementing rebates.
As a way to try and drive efficient distribution in the system. So I think that the takeaway here is this environment is going to continue to be very dynamic over the next next couple of years and that's good for us because where the we are the system of record for compliance.
Okay, great. Thank you both very much thanks Pat.
At this time I would like to turn call back over to Mr., David Barden for closing comments.
Thank you no further comments thanks, everyone for joining us today, we really appreciate it.
Thanks. This does concludes today today's teleconference. You may disconnect your lines to time and have a great.