Q2 2022 Manhattan Associates Inc Earnings Call
I'll start one one.
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I'll start one one.
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Okay.
Good afternoon. My name is dilemma and I'll be your conference facilitator today at this time all participants are in a listen only mode I would like to welcome everyone to the Manhattan Associates Q2 earnings Conference call.
After the Speakers' remarks, there'll be a question and answer session if you'd like to ask a question. During this time slowly press star one one on your telephone keypad.
As a reminder, ladies and gentlemen, this call is being recorded today July 26 2022.
I would now like to introduce Mr. Michael Bauer head of Investor Relations of Manhattan Associates. Mr. Bauer you may begin your conference.
Thank you Bill and good afternoon, everyone. Welcome to Manhattan Associates 2022 second quarter earnings call I will review, our cautionary language and then turn the call over to Eddie Capel, our CEO . During this call, including the question and answer session. We may make forward looking statements regarding future events or the future financial performance of Manhattan Associates.
You are cautioned that these forward looking statements involve risks and uncertainties are not guarantees of future performance and that actual results may differ materially from the projections contained in our forward looking statements I refer you to the reports Manhattan Associates files with the SEC for important factors that could cause actual results to differ materially from those in alpha.
<unk>, particularly our annual report on Form 10-K for fiscal year 2021, and the risk factor discussion in that report as well as any risk factor updates we provide in our subsequent Form 10-Qs. We note in particular that turbulent global macro environment could impact outperformance and cause actual results to differ materially.
Our projections, we are under no obligation to update statements. In addition, our comments include certain non-GAAP financial measures in an effort to provide additional information to investors. We have reconciled all non-GAAP measures to the related GAAP measures in accordance with SEC rules, you'll find reconciliation schedules in our form 8-K, we submitted to the SEC earlier.
Today and on our website at <unk> Dot Com now I will turn the call over to Ed.
Thanks, Mike Good afternoon, everyone and thank you for joining us as we review our second quarter results and discuss the increased outlook that we have for full year 2022.
Manhattan delivered a record Q2 record first half results.
Generating Q2 total revenue of $192 million and adjusted earnings per share of <unk> 69.
Both exceeding our expectations.
Specifically, 48% growth in cloud revenue and 19% growth in services revenue drove our top line performance and strong earnings leverage in the quarter.
Our global teams are executing very well for our customers and we continue to invest in our people and in R&D.
Our consistent investment in unmatched industry expertise are key factors in our continued strong customer satisfaction levels and innovation that differentiates our mission critical Manhattan active platform and solutions.
The industry, leading innovation that we're delivering to the market is a key component to our customer success, providing them with the ability to adapt quickly and efficiently to changing market conditions.
Profitably scale their businesses.
Frankly factors that contributed to a 75% win rates in the quarter.
Despite FX headwinds in Q2, <unk>, the leading indicator of our growth increased 84% to $898 million.
Excluding the FX impact due to the strong dollar <unk> totaled $928 million up 90%.
And regardless of any FX movements were on pace to exceed our prior outlook of $1 billion in RP over the second half of this year.
Demand for our cloud solutions is strong and broad base across products industry verticals and geographic locations.
It also remains robust from both new and existing customers.
Similar to Q1 demand from net new customers was particularly strong and contributed 50% of our total bookings in the quarter and while the mix of bookings will certainly vary on a quarterly basis, we believe that net new customers generating about 55% of our cloud bookings in the first half.
The year exemplifies the unique value that we're delivering to the market in a large and growing opportunity.
From a vertical perspective retail manufacturing and wholesale continues to drive more than 80% of our bookings in the quarter.
Across our client solutions to sub verticals are pretty diverse for example in the quarter cloud deals. One include a manufacturer of recreational vehicles food distribution wholesaler of Japanese multinational conglomerate that specializes in electronics and industrial products, especially retailer rolled in.
Motive parts and industrial manufacturer and a large fashion brand as well as a number of others. So you can see pretty diverse.
And that pipeline continues to be robust with solid demand across our product suites are net new customers represent about 35% of that demand.
On the services front, our global team continues to execute very well conducting well over 100.
Please remain on the line your conference will resume shortly.
Please remain on the line your conference call will resume short.
Hey.
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Vertical to vertical.
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Hydro Amazonian, Jeff Youre back on.
Back on <unk>.
Are we in the public cloud right now.
We are we are alive at the moment.
Okay very good alright.
Everybody have a very sorry about the technical difficulties protects I'll pick back up and talk a little bit about our client pipeline I think I had mentioned this to the vertical diversity that we experienced in Q2 <unk> pipeline and I think I mentioned this continues to be robust with solid demand across our product suite.
And our net new customers represent about 35% of the demand in our pipeline.
On the services front, our global team continues to execute incredibly well.
They conducted well over 100 go lives in the quarter.
And companywide, we continue to make really great progress against that hiring.
We added over 300, new team members during the first half of the year and expect to be at least once the has and employees by the conclusion of 2022. These.
These hires will contribute to air.
Ability to meet future customer needs grow in market share and extend our addressable market.
Speaking of our team we are very proud that we were recently voted by them a top place.
Place to work in Atlanta for the 10th consecutive year and we want similar awards this year in India, Australia and Singapore.
I'm also very happy to report that in mid May we hosted in person.
Customer conference and it really was a great success.
Tendons for the event was strong and terrific to see and talk and collaborate with that customers and partners face to face.
Our innovation and product strategy.
At the conference we brought together the industry's top agents of change and we laid out our vision for agile and sustainable supply chain commerce.
So let me spend a moment or two on a couple of the newer product concepts that we rolled out at the event.
Solution Assembly.
And more than half of <unk>.
Hatton active platform develop accordingly.
So regarding solution Assembly, what we see this concept as the logical next step for the solution unification strategy that we introduced in 2017 as a reminder solution unification refers to the unique way that we deliver best in class order manager.
Point of sale and customer relationship management into a single unified experience called Manhattan active omni.
And the same concept holds true for the unification of active supply chain with warehouse management transportation management yard management.
Automation orchestration and so on.
And our momentum this year, we introduced our customers to the concept of solution assemblies and assemblies refer to the Manhattan designed to develop and to win slows which span a major.
Manhattan active client offerings omni supply chain and inventory.
So let me give you a quick example to illustrate the power of assemblies and the strong cross selling opportunities within our solutions.
Given the challenge that inventory continues to pose let's review a solution assembly in this area that we specifically demonstrated up momentum.
By Assembly Manhattan active allocation and Manhattan active omni, we help her fashion and apparel customers maximize margin and sell through of their own inventory from the time the inventory a rise in the market to the end of the selling season.
The key to this particular assembly is the way that allocation continuously inform sort of management about the health of every inventory position throughout the supply chain network and armed with this real time inventory health data.
<unk> uses the global view of direct to consumer demand to proactively reduce inventory positions, where they are running heavy and avoid those locations where they're running late.
Assembling allocation on order management, it's really made possible via the unique way that we connect Apis across our client deployment.
And this has the box assembly reduces both IC complexity and delivers material revenue margin up like in this case for a specialty and apparel customers.
Turning now to one of the other key highlights for momentum technology.
Since we introduced the Manhattan active platform in 2017, it's cloud native evergreen and auto scaling capabilities of delivered game changing innovation for our customers as we've talked about these technical capabilities have been really important differentiators for <unk> solution across a number of applications.
Patient categories.
Like the functional capabilities as the Manhattan active applications of technology in particular, the extensibility of our underlying tech platform is vital to our technology focused customers.
But momentum we introduced the Manhattan active platform developed reported as self guided reference tool for the technologists and developers within our customer base.
Now paired with proactive app platforms tools, we're extending the base behavior of Manhattan active applications. The developer portal provides technologies for the ability to incorporate our extensive library of API into their broader technical landscape.
And we believe that.
The strong demand that we're seeing for Manhattan active applications reflects the mission critical and strategic innovation that we continue to develop it.
Enhancing customer experiences and customer service remains top of mind for leading enterprises and when combined with the capabilities that we offer and maximizing revenue and profitability of own inventory, we expect demand for our solutions to remain strong.
And that concludes my business update Dennis is going to provide you with an update on our financial performance and our enhanced outlook and in Arcos close our prepared remarks with a brief summary, before we move to Q&A. So Dennis.
Thanks Eddie.
Our Manhattan Global teams continue to execute exceptionally well as we delivered strong financial results across the board while significantly investing in the business.
We are tracking well compared to the rule of 40 as top to bottom line. We continue to raise the bar in a choppy macro environment.
Delivering strong quality of earnings that includes growth profitability cash flow and great balance sheet metrics I'll start with a quick recap of the quarter with growth rates on a year over year basis, unless otherwise stated.
So total revenue was a record $192 million at 16% as reported and up 18% in constant currency exclude.
Excluding license and maintenance revenue, which removes the compression driven by our cloud transition as reported total revenue was up 26%.
Q2 cloud revenue totaled $42 million up 48%.
We ended the quarter with RPI of $898 million growing 84% and 11% sequentially.
As Eddie mentioned, excluding approximately $30 million in first half FX headwinds RP O totaled $928 million up 90%.
We are well positioned to exceed the high end of our $1 billion <unk> outlook. During the second half of this year of which we estimate $15 million to $20 million and potential FX headwinds rigor.
Regarding <unk>, we expect to update guidepost on our Q3 earnings call.
Q2 services revenue knocked it out of the park pass in the century, Mark recording $101 million up 19% as cloud sales continue to fuel services revenue growth globally.
Our Q2 operating profit totaled $53 million with.
The operating margin of 27, 5% and.
And importantly, we continue to invest for future growth in Q2 revenue growth combined with operating leverage drove the outperformance versus our prior 24% operating margin target for the quarter.
This resulted in record Q2 earnings per share of <unk> 69 cents up 13% and GAAP EPS was <unk> 49 cents.
Turning to cash is King Q2, operating cash flow was a solid $53 million up 16% adjusted.
Adjusted EBITDA margin was 28% and free cash flow margin was 27%.
As we discussed last quarter, our Q2 cash flow absorbed $13 million of incremental cash tax associated with U S tax cuts and jobs Act that did not impact us.
So a year ago in the year ago period.
I refer you to item eight on our earnings release for more information on the timing of cash tax payments under this new law.
Regarding our balance sheet.
Let's start with solid.
Deferred revenue increased 42% year over year to $179 million, we ended the quarter with $214 million in cash and zero debt in the quarter, we invested $50 million in share repurchases, resulting in $100 million in buybacks invested.
Year to date.
Also our board has approved a replenishment of our $75 million share repurchase authority.
Now turning to our updated 2022 guidance.
As consistently mentioned our financial objective is to deliver sustainable double digit top line growth and top quartile operating margins Benchmarked against enterprise SaaS comps of which we are doing with.
With our strong first half performance and increasing visibility we are again, raising our 2022 outlook.
We are raising our total revenue range to $733 million to $741 million with a $737 million midpoint, representing a 11% growth.
As reported and 14% growth removing FX impacts.
This is up from our prior guidance midpoint of $723 $5 million and 9% growth.
Excluding license and maintenance attrition growth would be 21% as reported and 24% removing FX for.
For Q3, we expect total revenue of $183 million to $187 million with a $185 million midpoint, delivering 9% growth year over year.
Excluding license and maintenance revenue Q3's expected growth at the midpoint is 18% and removing FX growth would be 22%.
We are increasing our operating margin range to 25, 5% to 25, 7%.
Up from our prior midpoint of 24, 5% and our original midpoint of $23 two 5%.
And we have previously highlighted our 2022 operating margin guidance factors in continued investments for growth.
Including hiring talent.
Yes, I said we are hiring.
Retention and performance based compensation as well as the return of pandemic impacted expenses such as our in person momentum conference.
As well also just a reminder, our margin is also impacted by license and maintenance attrition on customer demand for our cloud solutions.
Regarding full year adjusted earnings per share, we are raising the range to $2 35 to $2 39, Thats, where the $2 37 midpoint.
Which is up 9% from our prior midpoint of $2.18 and for GAAP EPS. Our guidance range is moving up to a $1 63 to $1 67.
For Q3, we expect adjusted EPS of <unk> 56 to 58, six and GAAP EPS of <unk> 36 to 38 with.
With the difference between adjusted EPS, and GAAP EPS solely representing investment in equity based compensation.
Further drilling down on revenue for the full year 2022.
We are increasing our cloud revenue range to $170 million to $172 million, representing 40% growth at the midpoint.
We estimate cloud revenue will be approximately $44 million in Q3 and $47 million in Q4 at the midpoint.
And for our services revenue, we are increasing our forecast to 382 is $387 million at the midpoint. This represents 15% growth and on a quarterly basis represents Q3 services revenue of $101 million and for Q4.
$93 million to for accounting accounting for traditional retail peak seasonality.
For maintenance revenue.
Slightly refining our revenue range.
You can find out.
I think okay.
We did I believe.
Can you hear us.
Operator.
Yes, we can your line is open Sir you can go ahead.
You have to be thinking MTS, Michigan.
So just backing up here a little bit for maintenance revenue were slightly refining our revenue range to 135.5 to $136 $5 million.
At the midpoint for Q3, we anticipate maintenance revenue of $33 million and $32 million in Q4.
We expect license revenue to be about 2.5%.
Total revenue, averaging about $3 million in license revenue per quarter for the remainder of the year for hardware, we expect about $4 million in Q3 and $5 $5 million in Q4.
Now moving our shifting to what we do well, which is profitability for consolidated subscription maintenance and services, we expect margin to be about 54% in Q3 and 53% in Q4.
For operating margin at the midpoint, we expect about 25% for Q3 and 23% in Q4.
Remember the Q4 sequential decline in margin accounts for retail peak seasonality.
Paul said at the midpoint of our guide we expect to achieve full year operating margin of 25, 6%.
Finally, we expect our tax rate to be 21, 7% and diluted share count to be approximately $63 5 million shares which assumes no buyback activity.
And finally in all caps that covers a resilient financial performance update for Q2 and first half of the year. Thank you and back to Eddie for some closing remarks, just terrific. Thanks, Dennis will listen I apologize for again for the technical glitch that we may have had during the during the call I hope it didn't repeat in <unk>.
<unk> your ability to understand the breadth of our Q2, because despite the FX drag that we saw in the quarter. We're very pleased with that second quarter results and frankly, a year to date results.
While we continue to operate in turbulent global a turbulent global macro environment. Our teams are executing incredibly well and our business momentum remains very positive demand for our solutions is strong and our pipelines continue to progress very well as new and existing customers both on a shift direct in.
History, leading cloud native applications.
So thanks, everybody again for joining our call and also thank you to our employees for all the Fabulous work that you're doing around the globe with that <unk>, we'll be happy to take any questions.
Thank you Sir as a reminder to ask a question you would need to slowly press star one one on your telephone.
Please standby, while we compile the Q&A roster.
Okay.
Thank you.
And I show. Our first question comes from the line of Terry Tillman from choice. Please go ahead.
Yes.
Congratulations.
You can't be silence, despite a bad conference call operation. So it's good to see the results and I guess, if it wasn't for currency, you've got pretty darn close to even getting the low end of the ending of your RP O. So that was good to see and thanks for the FX impact color.
Alright enough from a preamble.
One question I was going to ask you Dennis just relates to that there was a pretty meaningful subscription or cloud subscription revenue acceleration into Q2.
48%.
No you are not giving any update on guidepost, but like the idea is the way subscription revenue would build would actually really accelerate into 24, if I am not mistaken I know youre, not giving any update but we're already seeing an acceleration into Q. How are you thinking about cloud sub revenue in the visibility over the next couple of quarters and into next year.
Yes.
Ladies and gentlemen, please continue to hold your conference call will resume momentarily.
Okay.
Okay.
Okay, Mr Bauer Youre back on.
Terrific. Thank you.
Alright dilemma will I think we've concluded the call we'd be happy to take any questions that might be inline chair. Mr. Tillman. Your line is open could you. Please repeat your question.
And this gives me an opportunity to clean the question out there was a sloppy question phenomenon and make a real tight so Dennis the question is this.
Cloud subscription revenue accelerated actually notably up to 48% I know you are not changing any of the guide posts across the kpis, but is there any potential change from what you all were thinking originally about how the cloud sub revenue builds over the next couple of years, including the acceleration in 'twenty four.
I would say we are optimistic about that Terry but given the guideposts that we provided where were multiyear we did make it clear it will only revise those longer term estimates on an annual.
On an annual basis, so we're definitely encouraged but I think.
Will will will defer frankly that question and the answer to the question until the until the end of the year.
Okay got it maybe Dennis.
Barbara for you, though on the cash flow anything to think about I mean in other seasonality.
On expenses, and then PS revenue, but you had the big cash impact tax cash impact but.
We saw strong cash flow any sense on how we think about free <unk> cash flow and then had a final question on Friday.
Yes.
Our cash flow margin of it probably be similar to our operating margin right in that range.
For both quarters.
Yes.
The cash impact.
We saw strong cash flow any sense on how we think about free <unk> cash flow and then had a final question for today.
Our cash flow margin of it probably be similar to our operating margin right in that range.
For both quarters.
Yes.
Okay cool thanks for that and then maybe Eddie just.
It feels like the old days of me wanting to ask about Adobe about refresh cycle in your case it you've got the cloud innovation, that's going to draw people into wanting to do that can you give us an update on where you are in terms of customers that are now embarking on the cloud Wm strategy. I know you gave us an update over the last couple of quarters, just whereas the building now in terms of how.
Many folks are in process. Thank you.
Yeah, that's a great question I think it changes.
On a every few days, so I might be off plus or minus one or two but we're at about 73 customers under under contract Terry.
Across I think we're either 11 or 12 countries now.
One of the one of the two.
And.
We're over 40 sites our lives.
Across the across the customer base, we frankly are pretty busy.
Summer season here of of go lives and so forth. So it's definitely very encouraging.
That's great nice job and good luck in the second half. Thanks. Thank you. Thank you Terry I appreciate it.
Yes.
Thank you.
And I show. Our next question comes from the line of Brian Peterson from Raymond James. Please go ahead.
Hey, gentlemen, congrats on the strong quarter. So I wanted to unpack that the servicing strength a bit it was up 19% on an 18% comp.
And obviously the guidance is up for the year.
How do you think about the trajectory of that business I mean, what we're all seeing the news in terms of the macro but obviously the RPM brokerage is really strong there seems to be a lot of cost currents out there. So yeah. As we think about maybe the kind of two to three year outlook for services like how do we think about that in the current macro.
Yes, well again will for me when we think about the two to three year outlook, Brian will update that at the end of the year I think updating two or three year outlooks every couple of quarters might be might be a bit too much of volatility volatility built into it but having said that.
As you know we have good visibility into ore into a services demand frankly because of all the software sale gentlemen, please continue to hold your call will resume momentarily.
Alright.
Hi.
Okay.
Can you guys give idea Eric now now with Jefferies.
Yes, we can.
Yes.
Yes mm wide.
Eddie I can hear you.
Okay very good thank you, Brian sorry, sorry about that.
So we can oversee services you know kind of lags a little bit the software. The software sales we've seen very strong software sales, we see strong demand for our services you can see that frankly in the hiring profile that we that we have we've added 300 people. So far this year, we're going to add another couple of hundred at least.
And the balance of the year at the top 4000 4000 associates, we got good visibility as the next several several quarters from a services demand perspective.
We feel obviously, we feel we feel terrific about it there is a.
I know there's been some questions about will the services attach rate be the same brink and <unk> solutions. So they were on Prem and we've been saying, yes to that and I think Mag DNA, you can actually see that coming to the coming to the fore in that services revenue growth.
That's great and Eddie maybe just following up and these are for double dip on the macro questions here, but you mentioned the kind of diversification into the verticals you know I'd love to get your sense.
The health of the diversification of the customer base today, maybe versus prior economic challenge periods is out of nine.
Love to hear kind of how the product portfolio has changed and maybe where in terms of customer exposure health is different today versus maybe five years ago.
Yes, I mean, clearly more diversity across verticals for us helps with.
Less less exposure and so forth, but in general.
The the.
What ive, even where particular segments of the market might be might be challenged and there is still a desire to make sure they maximize market share.
Maximize customer satisfaction and maximize customer retention and that's what we can help with so even in a market that tightens up a little bit there is still obviously competition to ensure that customers are being serviced with inventory serviced at the levels that they expect and so forth and those are areas that we.
We can help hence the reason I believe which we continue to see kind of strong demand for both our solutions and services.
50% net new logos here yet.
Understood. Thanks, guys congrats.
Thank you Brian .
Thank you.
And I show our next question.
Comes from the line of Matt Pfau from William Blair. Please go ahead.
Hey, guys. Thanks for taking my question and Great results.
Wanted to ask on the on the new customers that you added and the strength that youre seeing there. So maybe just what do you think is driving that and appreciate it that it can change from from quarter to quarter and then when we look at that 50% coming from net new customers in the cloud pipeline is at 35%.
That indicate that your close rates are better with new customers or what accounts for that discrepancy. Thanks, yes.
Yes, I think the second piece is just been a a little bit of variability quarter by quarter Matt.
So it's not there's nothing frankly to analytical to build into to build into that but in terms of what's what we think is driving the new logo acquisition overall is really a couple of things.
One is we're seeing our penetration into verticals that we've not been as strong and before manufacturing, particularly.
And that tends to be driven by those manufacturing companies beginning to go direct to consumer.
A leading the types of sophisticated supply chain capabilities that we offer.
Secondly, we are having some pretty good success, replacing some older systems of whether it be competitors from the bygone years or or or takeaway from from current competitors again because of the underlying technology strategy that we have.
The advanced capabilities that we're delivering to the market that that are frankly needed today.
Got it and then just in terms of goodness switchover to the macro that the demand that youre seeing.
Obviously, some of your retail customers or prospects could be feeling pressure in their business.
Partly that's driven by inflation and higher cost, which your solutions can help solve is that playing a role in terms of what products are interested in or how they're thinking about adopting your solutions at all.
Yeah.
I would tell you that I think that's likely going forward.
To date, it's been more focused on how do we headwork customers.
Track and retain and service their customers and I think there I believe there are.
Focus certainly is turbulent times approach on making sure that they have great customer loyalty and they have great inventory management again, both of those things. We you know we can help with.
Okay, great. Thanks, guys I appreciate it. Thank you. Thank you Matt.
Thank you.
And I show. Our next question comes from the line of Mark Chapelle from Loop capital. Please go ahead.
Thank you for taking my question and nice job on the quarter. Eddie I was wondering if you just comment on your point of sale solutions or point of sale business during the quarter. If I recall correctly, you start seeing larger projects return to that business a few quarters ago and I was wondering if that's still the case.
Is it as we in fact, we had a couple of very nice wins in the quarter.
More more to come a little bit being a little bit later, but.
Some very strategic wins.
Ah.
Across multi brand.
Across our multi brand conglomerate.
You know I go lives are going well we.
We've seen two or three smaller granted 100, 150 250 store chains complete.
<unk>.
At point of sale across there across their entire network and that in turn and you know as we've talked about many times as you know is building some nice momentum for us so very very excited about the opportunity very excited about the reception.
Again multiyear strategy clearly, but.
Definitely encouraged about where we are.
Okay, great. Thank you and then as a follow up just to build on.
An earlier question I was wondering if you just comment on what Youre seeing specifically in the retail sector, which it appears from your results and guide, but youre not seeing any signs of a slowdown.
In the area.
Yes, I mean.
Pipelines are strong demand strong win rate is strong.
And that is that is obviously true on the software side, but the pull through on the services side is also strong too and obviously what that indicates is that.
Once the one software is purchased.
Customers are anxious to get that software live and delivering value for them. So.
Okay.
We feel pretty good about the demand profile.
Profile for sure again based on the pipeline and the visibility we have for the services business over the next several quarters.
Great. Thank you that's all for me thanks.
Thank you Mark.
Thank you.
And I show our next question.
Comes from the line of.
Where <unk> from Rosenblatt Securities. Please go ahead.
Thanks, nice quarter guys.
Thank you Laura.
First question just around a following up on the point of sales side of things I'm. Just wondering if you can refresh us on on your go to market here.
In in pursuing new customers and the point of sale side how much.
Or are you relying upon channel partners here or what's sort of your strategy.
No our strategy. Our strategy is is one of going direct glare.
So where we're direct in the market.
And of course, we've got partners, who help with implementations and in those countries and those kinds of things but are.
And go to market strategy is definitely through our direct sales force and that's where we're seeing the success.
Okay, Great and then just shifting over to the cloud.
Customers are so the net net.
Net new cloud customers are you.
Can you give us a sense of what they are.
As you are an average or sort of range at which they are landing as these new customers and then after a year sort of how those how those.
Our businesses are growing for you.
Well, we don't disclose the deal size Blair I'm, sorry, So so Canada can't comment on that but in terms of the implementations post sale.
They've gone well, a they're going well and be as I mentioned I think a little earlier, we've got a very busy summer and fall.
In front of us.
Some really terrific brands.
Both here in the U S and under and around and around the world.
Getting great getting great feedback frankly.
Great. Thanks, very much for your help.
Our pleasure Blair and thanks, Thanks for taking the time.
Thank you.
And I show our last question comes from the line of Joe for rank from Baird. Please go ahead.
Great Hi, everyone.
Wanted to go back to the macro a little bit of one thing that's been kind of fascinating we had.
Supply chain trade shows throughout the spring summer.
Customer conference was thrown in there and.
Really every indication we heard throughout that timeframe wise supply chain project inquiries going up year has started stronger than 2021 laptop and that's obviously a big point in contrast to the incremental updates we've been getting from kind of the retail macro where it seems like.
Like everything is kind of moderating.
And a lot of your customers are maybe resetting expectations. How would you may be characterize the divergence between the two things.
Is it may be the case, where a lot of your customers, obviously realize criticality around supply chain new investments.
So last year was maybe a year out getting budgets ready vendor assessments in place and now we're simply moving into the period of allocating these dollars are making the commitment.
Sorry, please continue to standby.
Your hosts who will join momentarily.
Please continue to standby your conference call will begin momentarily.
Okay.
Please remain on the line your conference call will resume shortly.
Mr. Borrowers are you back on.
Okay.
Please remain on the line your conference will resume shortly.
Great.
Sure.
Glen can you hear him here.
<unk>.
[music].
Yes, I hear you now Sir.
Mr. Bauer you can you hear me.
John can you hear us, yes, I came out.
We can hear.
Yes, I can hear you I have Mr. Rowe, Inc. Are still on the line. You May proceed with your question over to Eddie for Israeli here, well again, everyone. We certainly very much appreciate your patience. This afternoon, given the technical difficulties we had.
We're very appreciative of your support and we'll be sure not to have any technical difficulties 90 days from now when we look towards the reviewing our Q3 results with you in the meantime.
Please enjoy the rest of the summer.
This concludes today's conference call. Thank you for participating.
You may all disconnect.
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The conference will begin shortly to raise your hand during Q&A you can dial star one one.
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