Q3 2022 Copperleaf Technologies Inc Earnings Call
Honeywell recently launched and environmental sustainability index, which demonstrate some of the trends we have been discussing over this past year.
The index provides quarterly indicators of key trends pertaining to global efforts in climate change mitigation and others substantial and other sustainability initiatives.
The Global survey conducted last month included over 600 respondents and revealed that nearly 90% of organizations are planning to increase sustainability budgets over the coming 12 months.
And sustainability goals, we're perceived as the top corporate priority cited by 65% of organization.
Results from this data driven index reinforce our belief that powerful secular tailwind will continue to drive our long term growth <unk>.
Investments by the world's leading companies demonstrates the importance of sustainable sustainable practices, becoming a mandate from consumers investors and company boards all around the world.
ESG has always been a significant growth driver at Copper-leaf and during the third quarter. We commenced three new projects focused on creating client solutions to drive new environmental social and governance investments, allowing organizations to deliver on their ghd reduction targets and other.
Other ESG related objectives.
Globally technology, driven approaches to sustainability are being increasingly prioritized by businesses and Copper-leaf has proven solutions to meet the rising demand in the space.
I will now pass the call to Paul to provide some insights on recent customer interactions and win.
Thanks Jude.
Q3 marked one of our one of Copel its busiest quarters food sales lead generation, which continues to drive our pipeline growth.
Elevated activity has been driven by the increase in our global sales force coverage more in person travel and events as well as increased partner ecosystem traction.
Beginning in the fourth quarter of 2021, and continuing into 2022 copper leaf invested in attracting top sales talent and conducting sales enablement activities to improve our ability to prosecute the growing market for our solutions.
We're currently seeing the recent cohort deliver leads and pipeline activity, which are leading indicators of sales performance.
In Q3, coupled withheld two of its three in person regional community summit in London in Vancouver.
These were the first in person stomach failed at Coca leaf since May 2019, providing an opportunity for us to interact with our clients partners and prospects and share the company's new products and roadmap.
During the summit, coupled with subject matter experts should state of the usage of our product demonstrated newly launched features and led productive discussions on pressing topics such as vegetation management grid resilience and of course ESG.
The most impactful element of any couple of summit is having our clients share their insights and experiences with the community.
During the events Representatives from Duke Energy Electric utilities, Anglian water national highways National grid, Enbridge and Aes had the chance to present, the business benefits and process improvements they've realized using culturally a couple of solutions.
At the Americas Summit in Vancouver, one client presented a case study on how they build a defensible plan to streamline regulatory approval using the couple of solution quantifying $6 8 billion in benefits for $2 billion investment.
Previously the utilities regulatory commission denied that those plans submitted in 2016, and eventually only approved 75% of their request up to 22 months of negotiation.
Using properly 100% of the $2 billion plan was approved and a record seven months.
At the EMEA summit in London, David Riley head of carbon neutrality at Anglian water presented a case study showcasing how anglian water through the use of Copel <unk> decision analytics solution delivered a 62% reduction in capital carbon increase productivity and enhance decision making to.
Increase the value delivered to stakeholders.
As Judy mentioned, we continued to see strong demand from clients and prospects for decision analytics and support for the ESG initiatives and.
And we're pleased to have made significant topics, but sales funnel progress despite a softening economic backdrop.
Our pipeline has grown over 30% in the past 12 months, which speaks to the strength of our value proposition and the new go to market team we've been building.
Looking at the macroeconomic headwinds the long term picture looks robust however, a lack of client resource and a tight labor market continues to delay some client deployments and elongate some prospect sales cycles.
This year, we're seeing an accelerated move to SaaS deals, which reduces initial year revenue. It creates a larger recurring revenue flywheel for the future.
We're also seeing some prospects of being the smallest step in solutions as a starting point, which leads to a phased approach over time.
A strong positive trend is the return to any client in person client prospect in part in the meetings in the second half of this year, which is having a significant impact on moving deals forward.
I'd like to now briefly touch on a number of recent operating highlights.
Couple of leap H two.
Rapid start solution for the water market continues to gain traction with the addition of Portsmouth water to a growing list of clients Bill.
Building on the success of the <unk> solution, coupled leaf introduced a new rapid start solution for electric distribution companies to improve implementation times and reduce sales cycles with smaller regional utilities.
We've expanded to new geographies in Q3 with the signing of three new pilot project in France, Italy, and the Middle East as a result of the company's recent go to market investments.
Hopefully first rail client went into production in Q3, which provided a primary beachhead in this new industry.
Additional sector expansion has been made this quarter with pilot projects in both pharmaceuticals and mining.
The company released a couple of Sweet version $22, three which among many features included new options for native geographic information system support and.
And strategic depth dashboards for executive reporting.
The advanced analytical software for system level modeling went into production for the first time.
Couple if turbocharged scenario analysis support with a four fold increase in performance delivering the best decisions faster.
These new options will provide high value to clients and deliver incremental revenue streams.
In Q3 strong engagement continued with Copper-leaf labs, where the company collaborated on 63 separate client engagements supporting its strategy of innovating together within the <unk> community.
Couple of weeks decision analytics solutions address problems faced by companies across multiple sectors in the global economy.
Although we are not immune to the macroeconomic environment, our clients who are large critical infrastructure owners provide us with a degree of installation is they are making both current and multi decade investment decisions.
We continue to focus on growth in our core market sectors, adding new clients to our installed base and increasing the value we can deliver to our clients.
We are the leaders in this emerging market.
<unk> continued to see sustained growth tailwind and a large untapped opportunity.
Currently have a largest sales pipeline at any point in the company's history and we're excited about the future.
I'll now turn the call over to Chris to review, our third quarter financial results in more detail.
Excellent Thanks, Paul and good afternoon, everyone.
We're pleased to report that our third quarter results continued to deliver growth across our key financial metrics.
Revenue for the third quarter was $18 1 million, an increase of seven 5% from $16 8 million in the comparative period, driven by an increase in new clients and the expansion of existing clients.
Subscription revenue for the quarter ended September 32022 was $10 million, an increase of 22% from the prior year perpetual and term based license revenue was <unk> 4 million for the third quarter compared to zero point $7 million in the prior year as we continue to see our deal mix shift towards SaaS.
Subscription revenue represented 55% of our Q3 revenue, whereas perpetual and term license revenue represented two 2%, but perpetual and term license revenue will vary period to period due to the size and timing of individual deals.
Professional services and other revenue for the quarter was $7 6 million compared to $7 9 million in the prior year I.
And this segment represented 42% of Q3 revenue.
Our annual recurring revenue at September 32022 was $42 3 million or 27% increase compared to $32 2 million at September 32021.
As of September 32022, our net revenue retention rate was 109%. This percentage will vary period to period due to the timing of large expansion contracts within our existing client base and the mix between perpetual and SaaS expansion deals.
Revenue backlog was $93 1 million at September 32022, and 18% increase from $79 1 million at September 32021.
Gross profit for the third quarter was $13 3 million compared to $12 9 million in the prior year, representing a gross margin of 73%. The increase in gross profit was primarily due to growth in subscription revenue from the addition of new clients and the expansion of existing clients offset by a lower mix of perpetual and term licenses.
Net loss for the quarter was $7 5 million or a loss of 11 cents per share compared to a net loss of $3 3 million or a loss of <unk> <unk> per share in Q3 2021.
We had an adjusted EBITDA loss of $8 1 million for the quarter compared to a loss of $1 4 million in Q3 2021.
And we finished the third quarter with $147 1 million in cash comp.
<unk> to $161 4 million in cash at the end of fiscal 2021, which places us in a strong financial position to build on our advantage and further penetrate the investment planning in decision analytics market.
Our experienced the critical infrastructure market is more resilient in a recession than many other sectors and prior to going public we responsibly manage our cash reserves through multiple cycles, while continuing to invest in our long term growth strategy.
Considering the macroeconomic environment, we remain focused on rigorous business management and accelerating our path to profitability.
With a deep sales pipeline, our market leading products, a strong balance sheet and marquee reference clients, we continue to be well positioned to further strengthen our leadership in the decision analytics market.
That concludes our prepared remarks, and I'll now hand, the call over to the operator and open it up for questions.
Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press star followed by the one on your Touchtone phone.
Here are three tome prop.
Virginia requesting your questions will be pulled in the order. They are received should you wish to decline from the polling process. Please press the star followed by the Q. If you are using a speaker phone. Please lift the handset before pressing any keys one moment. Please for your first question.
Your first question comes from Dylan Becker with William Blair. Please go ahead.
Hey, guys. Thanks for taking the questions here and encouraging pipeline commentary Youre, calling out maybe I wanted to touch on the level of customer conversations and maybe how they're thinking about their investment expectations going into next year. There are probably going through that budgetary process right now, but maybe how how.
They're thinking about their own it spanned prioritization and maybe there is there any benefit as they're thinking about their own internal processes your capabilities of kind of striking while the iron Todd obviously at that time.
That's a key value proposition you can deliver to them.
Thanks Sterling thanks.
Thanks for the question. So maybe I'll start and then maybe I'll pass it to two Paul to maybe embellish it a little bit because he has been working closely with our clients. When we look at the cycle. The sales cycle. We are always working with our clients to ensure that if if our.
If our deals are planned for next year that we get them in that budget cycle of those clients and that happened as part of our sales process as we go forward and when we look at our clients I think that the value propositions that we have.
Are very compelling.
Even in challenging.
Economic climate.
So like like we have today, but we do see the focus on infrastructure in the world. We do see the ESG drivers and we're seeing our clients and this additional spend that they expect to put into the into sustainability, which is what I talked about earlier.
But even on the supply chain visibility, we can give them early supply chain visibility, we can give them agile opportunity to change their plan if things change and we can obviously help them make trade offs.
To pick the best investments that they can possibly make so we do see.
That our clients are excited about what we can deliver and our planning.
We can see from the visibility that we have.
To invest in our solutions like Copper-leaf moving forward because it can really address some of the challenges that they're seeing right now.
Paul I know you've been working even more closely with our clients recently.
Looked from both Europe to America to eight P. J, maybe you also have some commentary on that.
Yes, without reiterating too much of what you said, Judy I think one thing to add is that.
Budget cycles are different in different places.
The Japan budget budgeting process happens to coincide with the <unk>.
<unk> financial year, which ends in March.
Australia has different budget cycles again sort of most of them ending in June and study again in July so theres, a good spread of budget cycles through the year and as Judy said, it's absolutely part and parcel of a sales process.
So we work with our clients to ensure that we are part of their part of their budgeting process and part of their plans going forward.
We do feel that this is an opportune moment for us to be stepping in and helping our clients.
Going to find themselves in constrained environment and in some cases with <unk>.
Increased spend around climate resilience and a lot of the infrastructure spending that's going on at the moment.
Part of those conversations as well so.
These sorts of times, we can help to stretch their dollars further in depth.
Suddenly central to the value proposition that we provide.
Got it that's super hub.
Thanks, and then maybe maybe switching over to Chris or Paul as well too because you guys talked about.
Prudent expense management going forward, we'd love to get a sense of how youre thinking about your internal prioritization areas right. As you think about investing in a new market opportunities ongoing innovation and kind of the R&D side as well as it sounds like you've got kind of some of the prior sales and marketing.
Investments ramping now and.
And contributing to that pipeline growth, but thinking about how you guys are kind of prioritizing your own investment between that between those two areas.
Yes, as you say we've made a.
A reasonable amount of investment in growing our capacity over the past the past 12 months.
<unk> forward, we believe that.
We can maintain the current level of capacity and it was set up well in terms of their ability to prosecute 2023, and possibly into 2022 and some some areas of that business. So I think.
Maintaining.
Our current levels and maintaining and making sure that we're working on a on a current head count and getting the best out of that group is assisting with the answer that question.
Got it thanks guys.
Thanks Alan.
Your next question comes from the line of Maxim <unk> with RBC capital markets. Please go ahead.
Hi, Good evening I wanted to start with the H two O solution, you mentioned that data solution is a streamlined implementation of carpathia portfolio.
Introducing kind of a rapid start for electricity distribution can you talk a bit about what kind of off the shelf capabilities. It provides and whether this has the potential to shorten sales cycles.
Yes, good question so.
It is a rapid start solution.
It is.
It kind of low configuration version or an off the shelf configuration version of our standard products.
The plan for that is that we step in we provide.
A quick path to early value in the in the areas that our clients are most concerned about and then after that we have a plan going forward to expand out so expand out into the into the rest of the full full fully deployed suite.
So it's part of our land and expand model.
It's not really any different to that and yes. The answer is definitely yes. It is shortening our sales cycle as you can see in the U K water market, where it's where it's been initially launched.
Got it okay. That's helpful. Thank you and on the seasonality.
Seasonality you typically see the bulk of your bookings in Q4.
Is there any progress that you can provide on that as I've been kind of progressing.
<unk> been expecting or is there any change that seasonality given like you mentioned and now the budget cycles are potentially more spread out throughout the year.
Yes, it's a very interesting question I mean, Q4 is always a big quarter for us.
Generally more than 50% of the bookings for the year and this year is no different.
Yeah.
The question around whether its spreads out through the year because of the different budget cycles globally.
It does but the predominant still lands in Q4, and we find ourselves like most global software companies to be Q4 heavy.
We have good pipeline to prosecute Q4, so although it's a it's always a big quarter for US. We can we can certainly say the number.
And we are starting to see.
The progression to SaaS accelerate and that might be a little bit of downside pressure on perpetual revenue that.
It builds up L. L ongoing recurring revenue flywheel to long term that's good for us.
But the answer is always that Q4 is a fairly big year in.
We will be working on that going forward in terms of producing linearity through the quarters, but it's likely to remain quite big.
Got it okay. That's helpful. Thanks.
And switching to the consulting partners I think you mentioned the strength in this quarter as well can you talk a bit about how that kind of prior relationship hasn't been playing into your.
Go to market strategy across the sectors and geographies in terms of has there been any change in how many of your deals are partner influenced or noticeable shortening of sales cycles.
Or have those stayed about the same and I guess, just adding onto that I think.
The existing partners that you have have already been fully built out their copper-leaf practices by now or is there still room to kind of ramp up within the existing partners.
Yes, we're seeing increased partner activity and I'd say that the number of deals that we see that are touched by partners as a percentage is increasing year on year.
We're getting more programmatic as to how we approach our partners and I think they're more of a programmatic part of our go to market.
Now then if they have been in the past.
In terms of whether they've built out their practices and they fully ramped I'd say this off from it.
They really in most cases, just starting and I think we've just got to the point, where we are of scale. So that they can really see a pathway to investing more in building a practice with us.
So there's a long way to go and currently we're in a certain number of sectors and I think as we grow they will build out different sector practices as well.
Great stuff good momentum.
And and still a long way long long run way to go before we're tapped out.
Thanks, I'll pass the line.
Your next question comes from the line of Tom.
Analysts Marsha poulos.
With BMO. Please go ahead.
Hi, Good afternoon, maybe just to clarify the commentary on sales cycle ultimately on the one hand you.
You alluded to the resource challenges that customers have and the macro uncertainty on the flip side.
You've got the rapid start initiatives trying to shorten that.
You mentioned the return to in person sales, which maybe helps so should our takeaway be that.
Near term, there's been some lengthening, but with some of these initiatives that.
That could be sort of an operating for us or just how do we think about the mix when we think about the overall sales cycle.
Yes, I mean, theres puts and takes in there and we can't see the future perfectly but it feels like our clients are taking a little longer these days can make decisions.
That's certainly what we're seeing we're doing everything we can to shorten sales cycles through sales enablement through rapid start and through partner enablement and leverage leveraging the partner network.
Both in terms of.
Size and.
And other partners and.
We certainly see pressure on the on the elongation of sales cycles going forward.
And we're doing everything we can do to mitigate that.
Okay. Now you mentioned a number of pilots that are underway, including in new verticals.
Typically what's the timeframe for a pilot to convert to a signed deal.
Yeah. It's a good question I mean generally these pilots take 234 months to complete and then there's some kind of in an evaluation period after that and then it needs to fit into the natural buying cycle.
The annual kind of budgeting cycle.
Of the client so it's a little hard to put a direct.
A number on how long it takes to go from from proof of concept or proof of value as we like to say.
To purchase that.
That's been the general trend appears like 234 months of work with the clients then a joined evaluation and then after that they go into their buying cycle.
Okay, Great and then finally on newer verticals I mean, you obviously mentioned.
A couple of pilots you have going on as you look at the pipeline.
Are you seeing more of a trend of some of our industry.
And that just still predominant weighted towards traditional industries.
Any commentary in terms of what Youre seeing from a vertical next would be helpful.
I'll jump in on that one Thanos, yes, it's similar to what we've seen in the past where just as you said the majority of it is still core sectors electricity natural gas water.
To the tune of 80 plus percent.
But obviously, we've invested heavily in the market development team to look at some of these new sectors and we're starting to see that pipeline build with exactly that that investment starting to pay off.
Okay, that's great I'll pass along thanks.
Thanks, Dan.
Your next question comes from Gavin Fairweather with Cormac. Please go ahead.
Oh, Hey, good afternoon, I thought I'd just start out on the mix of kind of SaaS versus on Prem in the pipeline.
It sounds like your comp from your commentary Youre seeing an acceleration in that trend I'm curious if you'd agree with that assessment or whether we're just kind of continuing on along the longer term trend that you've been seeing for a few years.
I'll tell you I'll jump in and others.
Yes.
Certainly that is the long term trend we've absolutely started to see our you know.
For a while now started to see the transition from perpetual to SaaS.
But yeah certainly.
Certainly in Q3 and Q4 as we bunch up for what's typically a big quarter, we're seeing a combination of.
DLA elongation as Paul was just mentioning that does have a tendency to push some deals into 2023 of the next fiscal year and we're also seeing some of those perpetual deals actually convert to SaaS. So.
It's interesting and.
It's because we are dealing with relatively few deals in the Grand scheme of things as you know our deals are quite large compared to our relative size. So any one of these individual deals that converts from perpetual to SaaS can actually have quite an impact on our in year revenue.
And one thing I would add to that is we still see geographic predilection towards.
In a sudden flavors of software so Japan in the electric sector for example, still remains largely.
Perpetual based.
So we're seeing geographically there are some areas, which are which is slower to convert across too just as in others.
That's helpful. And then Paul you were touching on your prepared remarks on some of the newer members of the sales teams and looking at that cohort, specifically and how quickly. They are kind of developing pipeline can you just maybe discuss the trends that you're seeing on that front and how youre thinking about kind of the timelines toward ramp in bookings.
And sales force productivity from that in your group.
Yes, it's still still with the ramp that we've seen since the IPO.
We've been investing it's still relatively early days as you can understand and most of the capacity build has been focused on.
Generating some some positive momentum in 2023 and 2024.
We're seeing early good signs, it's great to see pipeline coming through and some deals progressing.
With the newer salespeople we generally.
It provides sort of nine to 12 months of ramp time.
Before they're fully productive.
And most of them are still within that period, but certainly we're seeing good early signs globally.
That team ramping well.
And then just lastly for me just given kind of the dynamic macro environment can you touch on any kind of shifts in sales tactics that you're taking to respond and specifically I'm wondering whether your kind of doubling down on customer success and driving base expansion just given some of the sales cycles wishing for new loan.
Rose.
Yes, I mean part of the part of the <unk>.
Go to market build has been that's been a billed the customer success management group in that strategic account management group.
Good people focused specifically on the installed base and making sure that they are achieving the success that we promised as we as we went through their initial implementation than that.
Progressing into into further implementation of the software.
But I would say that other things are.
Spending the offerings in <unk> in ESG.
Making sure that we are building a database of success stories at clients and making sure that we've got those white papers and success stories in place. So that we can share those with other clients.
And of course, we are lucky to have a fully referenced <unk> installed base than just about anybody that's implemented our software is happy to speak well of it to two other clients.
It's again, a little bit in line also with the fact that we help people do more with less.
So in times, where there is a bit of scarcity and there are some constraints. We also need to lean into that message to ensure that people understand that during these tough times, we're the right solution for them.
That's it for me. Thank you so much.
Your next question comes from Koji Ikea with Bank of America. Please Sir Please go ahead.
Hey, Thanks, so much for taking my question. This is George maybe Ryan on for Koji.
Just one from me I was.
Hearing your commentary on the lengthening sales cycles, but it sounded kind of like Youre seeing that in some sales cycles and perhaps not in others.
So I guess my first question would be.
Is that the case or is it kind of more general and then if it is the case that you are seeing kind of differences in demand between the verticals that you service is there anything to call out there.
Is there any sort of verticals that are perhaps seeing tougher sales cycles.
Thanks, so much.
I don't think it's vertical by vertical.
People coming into sort of tougher economic times.
Usually have their own circumstances individually from a company to company point of view, so it's more about that.
They are also in the middle usually of other software implementation, so there's capacity issues internally as well.
That we're seeing impact on these on these cycles and particularly during these times.
These things tend to tend to be exacerbated as decision making criteria. So.
I don't think there is a trend that I could draw or either geographically or within the sector for you but.
Generally speaking.
We're finding our clients.
Being more cautious and probably pushing things into more levels of the signatory authority.
So we have to go through more loops is another thing that we're seeing but I don't think I can I can draw a patent for it.
Okay. Thank you that's very helpful.
Okay. Thanks.
Your next question comes from John Chu with National Bank. Please go ahead.
Thanks for taking my questions I, just wanted to revisit the earlier one regarding to a rapid start product. So in a normalized scenario how much do you think product and shorten the sales cycle and also could you share with us some of the.
Early feedback from customers so far.
Sure.
Very hard to give you a number on shortening the sales cycle, but I think the best example of that is.
We've gone from having Anglian water I guess, a couple of years ago to now having seven of the of the sales.
Water companies in the U K on the on the product.
In addition to we are.
Summit that we had in London for EMEA.
A month or so ago.
We went to the the.
Water conference the asset management conference for water in the UK in Birmingham.
A huge number of the people that were in the room.
<unk> uses now.
That was really positive.
Okay. Thanks.
Go ahead, Yeah go ahead.
The other question that we're having right now is I'm just curious about what's driving your sequential increase in revenue retention rate I know, Chris you mentioned, a few factors like project size. So it's not a case for the 2% uptick this quarter.
Yes.
Quite honestly as you know I mean, we've got our targets are higher than where we're currently sitting at $1 15, $1 20 is what we think we can absolutely achieve based on just the opportunity the product opportunity that fits within our existing installed base today. So.
The shift from 7% to 9% while.
Move in the right direction is really just.
It's indicative of just a period to period variability, we see even with expansion deals and large expansion deals right.
Those can be quite sizeable and we can see quite a large uptick in our NR.
In any given period just from one of those expansions jumped.
Coming into the deal lines.
Okay. Thanks I'll topline.
Thanks, Jon Your next question comes from Todd Coupland with CIBC. Please go ahead.
Yes, good evening everyone.
I'm wondering if you could lay out.
What's your.
Hiring plans are over the next.
12 months and.
What areas of the business you plan to to add people. Thanks a lot.
Yes. Thanks.
We've as we've said, we've invested pretty well over the past 12 months and we've been focused on building our team and building capacity for growth.
With what we see of the macroeconomic environment, our focus is going to be on maintaining our head count through 2023 and building on the existing team.
So that's that's likely to be up plan for the next 12 months and we feel like we do have capacity to prosecute the plan for 2023 and gives us a good start in 2024 as well.
Okay I appreciate that thanks a lot.
Okay.
Your next question comes from Rob Young with Canaccord. Please go ahead.
Just on the program delay.
You are talking about does that have a different impact on perpetual versus numbers of services that part of why the software services, taking a little more prominence to regain more attraction movement there.
No we don't really see that Theres a difference between the two.
Companies have their own criteria as to why they go perpetual and why they go SAS and and I don't think it's linked.
Indelibly to what your to the delays that you're talking about.
And then.
The professional services line of services. Another line it was down year over year.
Got it correctly.
There's a couple of things in the quarter that the lab engagement 63 separate lab engages the pilots.
So it seems odd that its down just curious what's the driver there or maybe theres some context to better understand.
Yes, I wouldn't read too much into that.
Q3 was just.
A really big services quarter, where we were able to.
Two to book a lot of hours and close some services revenue. So it was if you look back through the history.
Right large and in fact, what you'll notice is Q3 services are typically our biggest quarter generally.
With Q4, there's been a lot of holidays and things like that and not all of our clients are always available. So it's not unusual to see a big Q3 quarter like that.
But yes, nothing in particular that really.
Cause that.
Maybe just two other questions I think you said that the top of the funnel is particularly where there's a lot of growth from the top of the funnel has really widened up.
If you think about the funnel top to bottom like is there any.
Variation to call out deals getting bigger or.
Just getting bigger I guess just anything.
That you could characterize that growth at the top of the funnel.
Yes, I think we are seeing.
Probably a little bit more variation in the funnel. So there are some bigger deals coming in we're also seeing some clients opt for Sip in solutions in which lanes into Atlanta and expand there.
It's just a lot more opportunities as we globalize and put more feet on the street in in different places around the world and also as we expand out into different vertical that obviously brings our extended pipeline with it as well.
So as we generate.
More reference cases in new vehicles every time, we do that it gives us the opportunity to go improve approach a whole bunch more people out of that vertical so that's what's driving.
Last question for me.
It seems like Theres, a lot of water announcements recently.
We're doing some of the work.
Ergo It seems as though your biggest one of the competitors you had was pretty strong in water in particular in the U K you want a lot of deals there.
So I was just curious if you could.
Describe why that's been so successful is that because you've been able to announce more deals there.
Lower.
I'm really curious.
Oh boy that is now passed away.
Judy.
Yeah, No I just wanted to jump in here.
Especially on the water side because this is one of my favorite topics I'm glad you brought it up.
Being able to.
Effectively take over the market in water in the U K against one of our kind of Gen. One of our competitors.
Where in their home country in their home sector.
I think it really speaks to the strength of our solution.
And also the strength of our solution to be able to move to different sectors like we've always been talking about sector ization of what we do.
And how applicable that is to other sectors and I think that thats, something where you really see that strength, there and that's going to start.
That of course apply to other sectors as we go forward being able to see.
Sector, either vertical is our solution with our value framework is really a very powerful tool and we've just been able to do that in the UK, which of course is mixing business with pleasure absolutely for sure.
In addition to that we're now seeing water expand.
Into other geographies beyond that so we've created this amazing beachhead in the UK.
And in addition to that.
We we see that water is of course, a large sector around the world and in particular water is very advanced in the U K, which also shows the power of our solution.
Are you able to deal with the most advanced challenges that these client base.
Great.
There are no further questions at this time I will now turn the call over to Judi Hess.
So I want to thank you for joining US today, we are excited about the ongoing business progress that we've made and the tremendous opportunity that we have in front of us and we look forward to providing future updates as the year progresses.
Thank you so much.
Ladies and gentlemen, this concludes your conference call for today, we thank you for participating and ask that you. Please disconnect your lines.
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Okay.
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