Q3 2020 VSE Corp Earnings Call

Hi, George this is Jeff so in terms of long term gross margin, we expect the box bone acquisition to be accretive and that will be right out of the gates and then additionally, having a larger business. We expect to continue to benefit from economies of scale as well as.

Network effects.

Great. Thank you very much.

Thank you George.

Your next question comes from Mike Walkley with Canaccord Genuity.

Great. Thank you and congrats on the strong results just another follow up question on on box, though now that the deal has been announced and you've gone back and forth. Some larger customers can you maybe share some customer feedback it for the one.

Experiencing is leading to any a cross sell or upsell opportunities to create more of a global footprint for somebody in North American customers.

Hi, This is David enthusiasm.

Anecdotally some of the comments what took you so long.

Just overall excitement about the two teams coming together to provide.

Unified offering around the world.

The customer response and universally has been positive that's really been encouraging to US you always hope and expect you'll be embraced by your customers.

For doing new things for them and certainly thats been the case in our experience so far.

In terms of cross selling up so we think theres tremendous opportunity as we begin to look forward.

Great and just my follow up question with the over 130% dollar based net retention, where there any special large deals closed in the quarter or any customers. Reviewing deals are really like like you talked about last quarter.

No nothing special to call out UBS.

Again, very broad based driven by.

By higher usage, both on the voice and messaging side. We also saw found favorable contribution from pricing as well as on our monthly recurring charges. So across the board just a great performance.

Great. Thank you.

Okay. Thank you.

Your next question comes from that Marshall with Morgan Stanley.

Great. Thanks on your new customer adds it was an uptick that we've seen kind of from some of the slowdown earlier in the year just wanted to get a sense of what you're seeing as far as sales processes for bringing on enterprise customers. You know are your sales rep traveling yet or people getting used to kind of a new no.

Normal oh, selling virtually just any color there would be helpful.

So we only travel where the customer welcomes us to do so and have done some.

And continued to.

Really be proud of the sales team for their execution getting over 2000 total customers is a great milestone.

And it's just been it's been a really rewarding year to watch sales leadership really fight through the friction of not being able to do business at shows and with enterprise connections. So important in person often couldn't be prouder of the marketing team for the demand generation the sales team for their.

Their morale their camaraderie and the results are really showing that and show through so I appreciate your kind words.

And then just in terms of Unbox phone you know clearly a good opportunity a great opportunity there for us to expand some of your relationships more globally I'm just in terms of timing of when you could start utilizing or expanding it to me or contracts more go away and utilizing box phones network.

We're excited about closing the transaction on time in full and really.

I believe that the complementary nature of the networks will yield both quality for customers worldwide, but also as Jeff mentioned.

The bedrock of the gross margin progress that Weve inexorably analytically made period over period over period over period. We will continue with this addition, as we March around the world together network effects and economies of scale just compound and so we're really excited.

Thanks.

Your next question comes from Andrew came with Kaleo Securities.

Hi, Thanks for taking my question.

First off I, just wanted to get a deeper dive into your channel strategy.

Okay and are you seeing a bigger uptake and I hear digital events and digital marketing, Hey, Mark Hey, Hi, They have you changed that strategy and then second for Jeff.

Or with the acquisition of box down can you give us any insight into that.

The long term operating margin trend. Thank you.

You bet the marketing team as I was just mentioning has rallied and pivoted away from going to shows like enterprise connect and hosting events and introducing who we are at bandwidth enterprise prospects to really engaging digitally and sometimes arranging for contemporaneous physical world delay.

Deliveries of whether its wine and cheese for a conference call, where seminar or webinars they've been so creative.

And continuing to drive great pipeline contribution to the sales team. It takes a lot of creativity and energy in this kind of a season and the flexibility that they've demonstrated has contributed significantly to our great performance in this latest quarter.

This is Jeff as far as the acquisition, we not only think that box bone will be accretive to our gross margins, but also to our non-GAAP net income they have been a profitable business throughout their history and in addition to the strategic merits the.

Financial profile was one of the things that was really attractive to us in.

In acquiring the company.

This concludes the question and answer session. This concludes today's conference call. You may disconnect. Your lines. Thank you for participating and have a pleasant day.

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