Q2 2023 Copperleaf Technologies Inc Earnings Call
'twenty three and some of what we're looking forward to for the future.
On today's call I will make opening remarks before passing it over to Chris to provide a detailed review of the financial results.
Following our prepared remarks, we'll open the call to questions.
Firstly, a review of our second quarter results in.
In the April to June quarter couple, if delivered 26% growth in annual recurring revenue and 23% growth in subscription revenue demonstrating continued momentum in the context of our ongoing transition to SaaS.
We also continued to grow our client roster with the addition of addition of several strategically important new clients in the second quarter, a couple of leaf welcomed Societe <unk> Italia or.
S. Gi, Italy is the second largest gas transmission operate as our first client in Italy.
Leaf asset will enable STI to create optimal asset strategies, incorporating both financial and non financial metrics and a streamlined investment decision, making progress process to maximize value while minimizing risk.
In line with its corporate objectives.
Additionally, a couple of bolt secured our first client in Ireland, and first oil and gas clients in Europe validating our strategic investment in these geographic regions and plan full approach to introducing Coppola solutions to new industries.
Additionally, in Q2, San Diego gas and electric <unk> announced their decision to rollout Coppola decision analytics solution to their entire enterprise.
<unk> began working with copper late in 2020 to support asset investment planning decisions for its electric transmission and distribution businesses.
This expansion <unk> will implement copper-leaf portfolio and call it value across its electric generation gas transmission and gas distribution lines of business as well as their facilities and it functions.
C G. Any enterprise worldwide rollout is a perfect example of how a couple they start generating value for our client and one line of business, which then becomes known as a center of excellence in value based decision, making and then progressively expands across the enterprise.
I am very proud of the progress we've made as a team in the first half of the year generating good growth despite continuing uncertain macroeconomic conditions in most of our markets.
We continue to see temporary headwinds like enhanced client sign up requirements limited client resources, and RFP delays, which we expect to continue through the second half.
Our focus is on improved continuing to improve execution, while charting our path back to profitability and I emerged from Q2 with a renewed conviction that we have the right operating model the right leadership and the right strategy to drive long term growth.
Face to face client engagements continue to accelerate in Q2 in May the couple if community gathered in Vancouver for 2023, Copper-leaf Global summit. The fifth in 2019, we were delighted that the successful return of a marquee event, which exceeded expectation attracting clients and partners.
Around the World, who attended the event to share their asset management journeys and properly success stories.
A couple if community continues to grow and diversity with the continuous addition of new clients from around the world in an increasingly diverse range of industries and the 2023 summit provided provided an incredible forum, but some of the world's leading organizations to share information and learn from each other as progress.
The emerging made to incorporate ESG measures into the decision process is a common discussion point and in particular climate resilience was a recurring theme at the summit across all industries.
As part of this discussion the regulatory landscape was also front and center as regulators are asking for more investment in client resilient climate resilience and greater transparency on the outcome risk reliability, environmental and social impacts from proposed portfolios of investments.
Partners were also a key feature of the 2023 summit and we saw a step change in the number of partners in attendance and also the active participation of partners in the client case study presentations. This highlights both the progress we've made with the build of our partner ecosystem and the importance of <unk>.
Properly engaging with our clients trusted advisors when it comes to introducing our innovative new products into the established digitized landscape.
Partners are a key plank of our global scaling strategy and we've been gratified to see concrete progress, resulting from the focus and resources. We've recently dedicated to building our ecosystem.
In March we announced that we signed and endorsed apps agreement with SAP <unk>.
June we achieved premium certification status and we are now live on SAP tool with couple of coupling portfolio for SAP.
This is the official trigger for joint go to market activities with S&P, which have now started in earnest.
Hopefully if continues to focus on innovation and extending the competitive advantages of our solution. During the second quarter. We released version $23 two of our product suite, which included among many new features are.
A material enhancement of Gis integrations and interoperability with users can improve their decision, making and the storytelling on their asset management plans by directly visualizing they calculate that that results in S. E T I S systems.
This improvement showcases calculates the ability to tame complexity generate value and clearly visualize information to aid in more effective value based decision making across the enterprise.
For the remainder of 2023 and into the future. We expect our growth to be driven by an increasing recognition that copper-leaf as the leading brand in asset investment planning software that makes value based decision, making at scale a practical reality across the enterprise.
Sustained industry tailwind such as the increasing needs of our clients to practically manage rapidly developing ESG agenda.
Acceleration of our ability to bring innovation to market in the form of new products and enhanced services.
Leveraging our investment in sales and marketing, which are demonstrating positive results with increased lead generation.
Pipeline activity.
And the expansion of course of our alliance ecosystem, which includes amazing new partners like at this stage.
In summary, I am very pleased with that progress and the way that our new operating model is starting to perform I believe that we're on track to meet our strategic goals. We continue to focus on prudently managing cash and innovating across our whole business with the aim of driving execution in the near to medium term and at the same time laying down.
On a sustainable global foundation for future profitable scaling and growth.
I'll now turn the call over to Chris to review, our financial results in more detail. Thanks, Chris.
Excellent.
Thanks, Paul Good afternoon, everyone.
We're pleased to report that our second quarter 2023 results continued to deliver growth across our key financial metrics revenue.
Revenue for the quarter ended June 32023 was $18 5 million, a decrease of 10% compared to $26 million in the comparative period, but driven primarily by the decrease in perpetual and term based software revenue as our clients continue to transition to SaaS.
Descriptions revenue for the second quarter was $11 7 million, an increase of 23% from the prior year, representing 63% of Q2 revenue as compared to 46% of revenue in Q2, 2022 again, highlighting our continued transition to SaaS.
Personal services revenue for the second quarter was $6 7 million, a decrease of 6% compared to $7 1 million in the prior year and this segment represented 36% of Q2 2023 revenue.
And finally perpetual revenue for the second quarter was 0.1 million, a 97% decrease compared to $4 million in the prior year and this segment represented only 1% of Q2 2023 revenue.
Our annual recurring revenue at June 32023 was $51 2 million or 26% increase compared to $40 6 million at June 32022.
As of June 30 of 2023, our net revenue retention rate was 111% reflecting expansion within our client base and our strong lineal history. This percentage will vary period to period due to the timing of our large expansion contracts within our existing client base and the mix between perpetual and SaaS expansion deals.
Revenue backlog was $107 7 million at June 32023, a 16% increase from $93 million as of June 32022.
Gross profit was $12 8 million, representing a gross margin of 69% a 19% decrease from $15 7 million and a gross margin of 76% in Q2 2022.
Gross margin decreased temporarily primarily due to product mix and an increase in partner subcontractor costs for the quarter plus increased head count in product support related to our growing client base.
As a result of our planned investments to capitalize on the inflection in the decision analytics market. We had an adjusted EBITDA loss of $10 6 million for the quarter compared to an adjusted EBITDA loss of $5 8 million in the prior year.
Net loss for the quarter ended June 32023 was $12 6 million or a loss of <unk> 18 per share compared to a net loss of $7 4 million or a loss of <unk> 11 per share in the prior year.
We finished the quarter with a strong balance sheet with $62 million in cash and equivalents and $75 million in short and long term investments, placing us in a strong financial position to build on our advantage and further penetrate the investment planning and decision analytics market.
With our strong unit economics, we remain focused on making thoughtful long term investments that will drive accelerated growth through 2023 and beyond.
We continue to expand our reach we are confident that our focus on operational excellence will drive best in class margins expand our leadership position in the growing decision analytics market and accelerate our path to profitability.
That concludes our prepared remarks, I'll now hand, the call back over to the operator to open it up for questions.
Thank you Sir.
Ladies and gentlemen, we will now begin the question and answer session.
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One moment. Please for your first question.
Your first question will come from Maxim meta Schatsky at RBC capital markets. Please go ahead.
Hi, good evening.
Wanted to touch on.
The fact that you were mentioning in the prepared remarks in the past you've talked about kind of a lack of resource constraints in your clients and perhaps.
Prioritization of projects I know the idiosyncratic on a case by case basis, but have you noticed any signs of that changing.
And can you maybe expand on some of the other factors you mentioned this quarter in terms of the enhanced client sign up requirements in RFP delays.
Sure.
Up on that Max the question.
It's <unk>.
It seems to be continue on it continuing on a similar trend to last year.
And it's not uniform globally, we're now a global company and I think country by country, we're seeing differences.
But on the whole the economies globally.
Don't feel like they're recovering substantially since last year I think if anything we're probably getting better at executing under those conditions.
That also is different per region.
The enhanced sign offs and the extra process that you go through in the procurement process is is more stringent under constrained conditions.
What that means.
And we expect that at some point that that will start to free up but at the moment.
In particular geographies around the world, we're seeing a we're seeing that it's still fairly constrained and we're still sort of swimming uphill a little bit swimming up river, a little bit in that in that context.
Got it.
And just it's great to see the the new client wins in new regions that are expanding.
Oil and gas as well I'm wondering how you think about the pace of wins in existing geographies as compared to going into new geographies and I know, it's a small sample set but are you seeing most of your wins come from established regions or is it more balanced regionally in terms of wins in your core sectors and geographies compared to the new country.
<unk>.
Emerging verticals.
Yes, it's a good question I mean, where you've got a bigger installed base you see more upsell opportunities and.
That's clear in the new regions, they're all new logo wins the tone of the business in those cases, it's just a little bit different but its probably pretty balanced we opened up a lot of new geographies. So we bought we've almost got more new geographies or at least as many new geographies as we would have established ones.
So purely numerically I think we're doing pretty well the good news is that the best that we place down in those new geographies are starting to come to fruition.
And we don't have as many places where were carrying costs without revenue we've at least got that.
Client and many of those new places.
Almost again by definition, we've got new account executives and new sales resources in those places and it's great to see them starting to perform so we're starting to get through that process with the the outstand and geographies without revenue diminishing.
And the outstanding salespeople without sales diminishing as well so everybody is getting runs on the board.
That's great and just final one for me and I'm wondering if you can update us on the go to market strategy in terms of.
Being successful I'm talking to customers at a more rapid start implementation of the constantly software is that still primarily a marketing tool or would you expect to see more customers being receptive.
Is that kind of implementation solution.
No that's definitely happening I mean, we've talked we've talked a fair bit about the <unk> solution for the.
The UK that's been that's been very effective.
We've got a <unk>.
<unk> solution for the electric.
Distribution.
Market.
We are getting better as well I think globally, it's phasing deals, particularly under constrained conditions people do want to get started with a couple of ways that they may not want to do a great big monolithic deal that.
Yes.
Many of those those implementation phases compressed into one big upfront deal. So I think.
I think in the context of rapid star to the de Minimis solution that allows smaller companies, particularly those that want to dip their toe in the water to get started we've got packages for that and we're revolving that strategy.
And the idea of the phasing deal diagnosing that part of the couple of weeks weight that.
Satisfies the most burning issue with our clients getting started with that getting.
Getting implemented quickly given the client that value and then moving into future phases, where we're well down that path as well. So there were two slightly nuanced answer to your question there.
Okay. Thanks.
Your next question will come from Gavin Fairweather at core Mark. Please go ahead.
Oh, Hey, good afternoon, maybe just to start on the SAP partnership can you just speak to the engagement level of their sales force now that you're kind of live within the marketplace and that can be comped now.
If we're selling copper-leaf and how are you thinking about the impact of that a partnership on sales cycles for deals with are involved.
Yeah.
So.
Really pleased to be up and running on the SAP piece, though that's a big milestone for us and.
We did forecast that we would be up and running on the store by the end of Q2, which we thought was a well buffett timeline.
But the certification process was pretty in depth and we were happy to get it through it and come through that with flying colors.
It was it was a serious review of that cyber security and the quality of our software. So it was great to get through that then.
Now, we're up and running and that's the official launch of joint go to market and the internal processes.
Processes kick in at that point and they get triggered.
Those things those things are ongoing.
The direct answer to your question, we have been engaged with the global SAP sales force, but well before the before we were up on the store. So we have stolen a march on that end and there is good cooperation.
Our three regions in three and a half if you considered Latin America as well are all engaged locally with local its IP counterparts, Theyre old planning joint pursuits on specific named accounts.
It is with understanding that that we do have to agree on the accounts between the two companies formerly that we're going after those those businesses together.
And that that process is it's starting and the engagement that we've seen so far through participation a couple a participation in some of the key events like the utilities conference in Basel.
For example, a global utilities event that was absolutely fantastic couple positioning Coppola has been.
In their presentations, we had SAP.
<unk> Global summit.
So we're starting to engage in enjoying participation in each others in each other's events, but we're also just in.
<unk> worked together in different different parts of the world.
Already submitted a couple of joint a joint proposal to clients and we do expect that to.
That just got to work in our favor early days.
Still even since we signed the agreement it's only been a quarter.
And since we were up and running on the store, it's only been a couple of or a month or so so it's early days, but the pipeline is starting to expand we are chasing concrete opportunities joined pursuits between us and those things are accelerating I'm excited about the about the couple of late.
Relationship and I think it's great for them.
And it's fantastic.
Fantastic for us to be involved with such a players.
And I will say that just just the fact that we have been invited.
As the AIP.
<unk> four is a pay through the <unk> process.
Huge endorsement of Copel <unk> and the value that we bring to clients in between the two companies, we can bring even more value.
Great to hear and then maybe just on the pipeline in your prepared remarks, you spoke about the sales force investments driving a good pipe at the risk of being early here in in early August I mean, how are you feeling about the ability of that kind of prosecute.
Decent number of deals as we kind of move into the busy selling season later in the year.
Yes, I mean, Q3, and Q4, I mean Q4, particularly as always there is always a hill to climb and I think we've talked this year about.
Prolonged deal cycles, and how we are a little bit more backend loaded than usual this year I think.
We're in a good position to do what we need to do I mean numerically. We've got good coverage on the accounts I think we've got better scrutiny on deal help than we ever have before.
<unk> added a bunch of processes around business and sales operations, which I think are taking it to a different level of being able to assess where we are in the accounts and then diagnose what we need to get to do to get those things done.
Those forces maturing.
So on that and we have pipeline together to cover the numbers. So all of those things numerically look good.
The question now is just time, we need to we need to get ahead of it manage time properly and make sure that we're.
We have we're starting to bring through those those deals.
Just couple if gets bigger the execution challenge just around contracting and doing all the work and having coverages.
It becomes more of a challenge closing one or two or three deals at the end of the year, you're closing your clothing big anomaly.
And so making sure that we've got the right machine in place and everybody has got the capacity to get that done as our is is something we're taking are taken seriously and making sure that we have coverage on that.
Yeah like I said, it's always a it's always a hill to climb and for us.
It's lumpy one deal one way or the other it makes a material difference to our closing result flavor of deals whether it's a SaaS deal or whether one of those perpetual deals that we had forecast goes to.
Go to SaaS makes a big number to a big difference to our revenue numbers obviously.
And you've seen that we have had a material move towards.
Our subscription and SaaS this year away from perpetual so far so we'll see how things go that.
We've got numerically good coverage on the number between here and the end of the year.
Got it and then just lastly for me maybe for Chris If I look at the cash operating expenses this quarter and kind of strip out the DNA and stock based comp.
It looks like it ticked down by about a million Bucks over the Q1 can you just.
Whether there are any kind of onetime costs in the Q1 or whether you've taken a little bit of cost out of the system and you know how we should think about the run rate on that metric there that's it for me.
So we are obviously managing cost pretty closely here.
And I would say that.
That's a combination of <unk>.
Straight up expenses, where we're looking closely at.
All of our travel things like that our tech stack that we put in place as well as head count managing head count very closely and performance and I would say in general the first half run rate is a pretty good indication of what we should expect through the rest of the year as far as the second half.
Thanks, so much.
Thanks, Kevin.
Your next question will come from Todd Copeland at CIBC. Please go ahead.
Yes, good evening everyone.
I wanted to ask about generative AI.
Obviously lots of model training going on more broadly and I'm just curious how that.
Impacts priorities at your target customers.
Where it fits with.
Within your own offering.
And how are your products might evolve to include that thanks a lot.
Yeah. Thanks, Todd I mean, it's obviously a rapidly emerging area.
And it's exciting for us.
Presents us with opportunities.
As as things started to heat up in that space at the end of last year and early this year.
We made a decision to to embrace.
Generally of AI in a careful way and the plant away. So.
We made it available to everybody at at Cop of late.
In a very safe and and controlled environment.
Which gives us two things one is the ability to use it for.
Internal processes, so that we're getting the benefit from an operational point of view from generative AI.
And.
And we the second thing is we have a small group of people working on how we incorporate generative AI into our product.
Early days on that so far but you can you can easily imagine the use of generative.
To help the occasional use.
From a.
Natural language into facing point of view and I think that's probably most likely the first way we will start to see it used in a concrete way it corporately, but down the track there.
There are many implications of large language models and in general did AI in what we do.
<unk>, which we only see as being a being a positive thing for us. It's a it's a great tool for productivity internally and we can certainly say that the functionality of.
Of those technologies that are going to be just just good for us helping people to get much more out of the out of the Coca leaf product.
And just one follow up does it.
<unk> is a disruptive risk to the library.
Of your own models someone coming along and being able to.
Re create that for target big infrastructure companies faster.
And.
And all the time it took for you guys to build up how does it impact something like that.
Well I mean, you always have to be where if something like this its usually it it's usually kind of positives and negatives of puts and takes but.
Quite honestly I think the one of the key benefits of that library is that those models are not just clever that tested.
They tested in battle with.
Large organizations with regulatory bodies.
And one of the one of the biggest things about that model library is that you can have confidence that the models in the library had been used.
In battle by Big companies.
The world in different regulatory environments, and I think that's something that you probably cant replace.
In a hurry.
No.
And I think we reiterated those things over time, so as we use then we improved them as we see different use cases around the world. We incorporate those use cases into the thinking associated with the model.
And it's also a combination of the different models that it's one thing having a library of them, but it's another thing bringing them together into a <unk>.
Into a coherent value framework for a specific client and knowing that they're all going to work well together.
And then have the software backup too to make sense out of that at scale across the enterprise.
It's a combination of different things, which doesn't lend itself to a pure lots language model or.
Generative AI use case, so we see it as much more of a tool and then enabling piece of technology than it is so much of a threat to us.
Okay. Thanks for the color I appreciate it.
Your next question will come from Steven Nicholson at BMO capital markets. Please go ahead.
Hey, guys. Thanks for taking my questions.
Just wanted to circle back on the pipeline or are you having any is there any change in the.
I guess, the tenor of conversation between new logos and expansions in this more constrained environment.
I'm not 100% sure I understand the question David.
Okay, I guess to rephrase it.
Is it the new logo conversations that are more difficult in this environment or are there similar difficulties with sei expansion conversations with existing clients.
Yeah look at it.
It's a little bit of both it's not saying much about our solution or what we can bring its its capital constraints.
Capital and resource constraints on their thought.
It's done.
It's obviously easier to talk to our internal to our installed base I mean, they they convinced at least of the.
Not only the value of the solution, but the ease of working with couple of way for the company in the previous experiences they've had but theyre. All constraint is what we're seeing and and they're just going through the prioritization process and we just need to make sure that we're at the top of the.
The tougher the prioritization Chen.
I think I think we're getting.
We're in a better position than we used to be from that point of view because we've got a pretty good global footprint of people now. So we can we can be in talking to the clients more often and more consistently and in their own in their own environment and in their own languages, but I think we're in a better position to make sure the way prioritize that.
It's both.
Not so much about calculate or technology, it's more about the <unk>.
Resources on their side.
Okay. That's helpful.
Going back to the SAP partnership I guess.
In the first few months are you noticing that youre seeing more opportunities from.
Clients, where maybe you wouldn't have been able to get a foot in the door or is it just an entirely new set of opportunities that are being surfaced.
Yes.
Our principle is that it needs to be incrementally additive.
There's no there's no point in getting getting paid to do the work that we could have done ourselves.
Speed aspect to that but but we want this to be incremental.
But.
With the best will in the World.
<unk> does not have the same global footprint global global coverage.
Unnecessarily, the Ricky brand recognition power that and if it.
So obviously, they bring new industries that we havent yet into new geographies coverage that we haven't yet got covered.
And.
There's also just that accelerated.
Aspects too.
We're able to to to have a trusted adviser and a larger a larger technology company like S&P vouching for a solution.
Okay.
It's not nothing that our products work well together.
It isn't just a one plus one thing or a go to market play.
We really do add value to some of the.
The asset management stack of software, which has.
Multiple solutions in and they suddenly add value to us and I think over time, we will be able to come up with innovative solutions that that really extend it. So it's not it's not just a one plus one equals two.
Okay Fantastic and I guess my final question in your press release, you mentioned.
You're executing on the go to market strategy and strengthening the global sales force.
Could you give us a bit more color on what's involved in that is it's more investment in processes or could you conceivably be adding head count or filling gaps somewhere.
Yes, I mean, it goes back to our strategy.
I think we're.
We.
We saw an inflection point in the market.
And this was this was prior.
The macroeconomic issues status since we IPO, Ed, but we we certainly saw an inflection point in the market. We expanded just coverage just the ability to ensure that we're not flying in and flying out large enterprise software. So it doesn't really get down on that basis.
So we've got good local coverage in a lot of places.
That took a little bit of time to ramp up.
People don't just arrive at couple of leaf or any enterprise software company and be immediately effective.
It always takes time to ramp and where we're getting through that now.
But theres additional aspects to this we've talked a little bit before about our global growth office.
In addition to good global account coverage you also need product specialization industry specialization really solid value engineering to make sure that we're articulating the value of the copper Leach solutions in ways that our clients can consume in ways that are relevant to them in their businesses specifically.
And we need the ecosystem. So if you bring those four things to bear and you've got very good local account coverage you start to build a matrix approach.
Next generation approach to too.
Two approaching those clients in covering the market and once you have that in place that minimum viable footprint that we've invested in over the past couple of years. You can then add capacity fairly quickly.
We have good capacity to prosecute this year and certainly we can we can take that capacity and prosecute a good deal of next year and as we see this market starting to recover as long as we've kept that minimum viable footprint in place we can accelerate very quickly with the addition of capacity.
Underneath that minimum viable footprint, we've got good leaders and all of those organizations. So you can start to add capacity.
Okay.
Great.
That's what the GTS looks like.
Alright.
Thanks for taking my questions.
Thank you.
Your next question will come from Robert Young from Canaccord Genuity. Please go ahead.
Hi, good evening.
Sure and look at the pro Serv down year over year is that just the.
Capacity issues on your customer side or is there some seasonality or vacations or is it like is there any sort of leading indicator there to read into.
Hey, Rob I'll start with that one.
So we did enter the year with lower backlog than we would have liked coming out of 2022, the macro certainly played a role there.
Then just as we've said in our press release and as we mentioned today on the call there are.
Our resource considerations here as well so even deals that were booked and implementations that were due to start they were either slow starts or they're being delays just due to resource client our client resourcing issues.
Okay and like is there any.
Opportunity, maybe I'm reading too much into partner.
Ramp, but is there an opportunity to fill in some of those gaps with partners or is that just way too early to be thinking about that.
No.
We're working with partners and they will inevitably be part of our professional services landscape largely we still do things did anything.
We've had.
New things and Youre aware of Mitsubishi Electric Mitsubishi Electric in Japan, They they work as a as a partner implemented.
But largely we do this ourselves at the moment that we're introducing more partners into the system and inevitably they will start to take up.
Some of that services burden, we'll always maintain a professional services organization internally will probably stream it down too copper-leaf specific high value added services over time.
And and use that to.
To ensure that we've got we've got good scaling with the way keeping the skills necessary to do high value added service work specific to a couple of ways for the clients in a way that that way of work and quality we are comfortable with.
And I'll just add on to that Rob as well that you know of course through the rest of the year. We're obviously looking to bring any services for whether it's partners or not more direct services bring those services for it and quite honestly when we look at the.
The potential bookings for the year. The services bookings are good. It's just a matter of revenue recognition on those services right as Paul was indicating earlier it is quite a back end heavy.
Year, and then with these delays, it's just a matter of when those implementations.
It started and when we can recognize the revenue on them and they just happen to be late this year. So we're not seeing a lot of increase in your revenue.
Okay. That's helpful.
Okay and then maybe last question for me just maybe a little more around SAP here, you mentioned that you've been identified as the solution SAP solution for AIP or accident plain I assume.
Is that an exclusive arrangement or are you just the only vendor that they can find or.
My overseeing that.
Yeah.
No I mean.
It's certainly not it's certainly not an exclusive arrangement.
But.
With an invitation.
Lee program do they scan the market.
With the <unk> and <unk>.
And we are partnering with them in the AIP space.
I don't want to there are certainly no guarantees in life that SAP 10 through this program to select best of breed and work very closely with that company.
To ensure that they can provide a full stack of software without necessarily having to reinvent everything themselves. That's that's the tenor of the program.
And what you are saying in the prepared comments about the premium certification.
Passing this very stringent code review and the security requirements is that a higher level than you were expecting when you were talking about getting onto the S&P store like is that a different certification of a higher level or is that really what you are tracking towards before and then I'll pass the line.
Look I don't know that we necessarily expected new what do we expect on the way through that certification process. It was a.
It was an external like a third party body that does this stuff for us.
It was extremely stringent we just went into it with the confidence that we after this class enterprise grade software and that we would pass it.
And it was a it was stringent I'm super proud of the <unk>.
The way that the comprehensive team responded to all of that and we got it done.
Reportedly record time, it felt like forever for us, but certainly if they pay a given us given us indication that we did pretty well through that process.
It didn't cause any any wholesale changes to the software.
Any cause for concern.
Closing out to try and upgrade something to meet this make the standard it was just the certification process.
Okay, well, thanks for taking the questions I'll pass one.
Yes.
Ladies and gentlemen, as a reminder, if you would like to ask a question. Please press star one now.
Your next question will come from Dylan Becker at William Blair. Please go ahead.
Hey, gentlemen.
Maybe Paul starting with you on the copper I think you guys noted the Copper-leaf summit being held for the first time in a handful of years here.
Kind of starting to align with the sales force maturation I guess could you elaborate a bit on what the value of these in person events can mean as youre starting to build awareness for the broader solution set and again I think there was a number of our mentioning of the partner attendance as well there too and how that's maybe helping you incentivize or pushed.
Them to kind of start building out their own internal practices outside of again their large SAP relationship currently.
And that last comment was that part of it.
Correct, yes.
Them to build their practices.
Partners and customers right, so, bringing those two together and kind of bring awareness to the ecosystem yet.
I'll try and cover ROM cover the gamut of questions. There and just let me know if I don't hit everything but yes.
The summit is a marquee event it brings together everybody into the room and it is a client uses comment right. So it is about people getting together and talking about the copper Leif experiences presenting the personal use cases, it's really centered around clients coming and presenting what theyre doing.
So it's a it's a platform for them to come together, we have different tracks, we use it as an opportunity to introduce anything new.
We've developed or to test out ideas of things, we might like to develop that have either been innovations coming from what we think are innovation that have been sparked by customer requests.
The partners.
There.
Largely in support of clients. So many of these partners are ones that we've actually heads.
Joining implementation to a cooperations on with the clients that are that are in the room.
And they often come with clients and like I said, we had multiple presentations of client case presentation. At this time that were done in conjunction with the.
The partners.
So we're starting to get to that point, where it's a kind of a triangular relationship between us the client and the trusted advisor.
And in <unk>.
Obviously, then you bring in the <unk>.
The independent software vendors like I say on the other side of things and and and it becomes it becomes a more complex ecosystem. All of that is very normal for enterprise software, we're not by ourselves that the clients digitized environment. We've got software on both sides of it then you've got besides making sense out of the entire stack and waiting.
Together end to end solution. So it takes that whole groups to be able to provide.
Proper unified solution to their clients.
We takeaway a lot out of those discussions watching our clients talk to each other about similar.
Issues, often across industries and across geographies really does give us a lot of Florida.
Going away and innovating.
Our product development group met with a lot of the clients.
A separate session to test out some ideas with them.
So it's great and we do have some selected prospects, we try not to overdo it but we do have prospects come along clients.
Prospective clients to really benefit from seeing those presentation thing the live case studies being able to question. The people that have been using the system for quite a while.
We're really blessed to have.
And installed base of clients, who are happy to do that and to engage with with a prospect and reference for us and help us to help us solve problems for those people to it's all of that.
In a compressed few days generally in Vancouver, and we haven't had one since 2019, we had a few.
Timid about bringing trying to bring everybody together in Vancouver last year.
Because we wanted whether we were far enough out of the pandemic. So we did a couple of things at the end of last year.
Geographically just just out in the region thinking that if one got cancelled then you still have the other two thirds to to do we managed to get all three of those done, but there's really nothing like bringing everybody together in Vancouver in may to.
So a couple of <unk>.
One of the highlights of that year.
Sure Yeah, no that makes total sense it sounds like a very important obviously engine for you guys.
And maybe you kind of touched on it in the.
Italy, but but emphasizing kind of the customer success side too getting everybody on the same page there. It looks like we're seeing nice traction on the expansion side again, how valuable is that in these discussions with those customers are getting a deeper understanding of that strategic roadmap that gives you guys. Maybe a further sense of a pipeline.
Average pipeline visibility as you think about again, the ability to expand within that existing base as well.
Yes, it's a good question Dan and thanks.
<unk> is obviously pretty good compared to.
Pretty much any benchmark in the in the market.
We retain clients and clients are happy to keep.
On the journey with us.
Like I said, we're getting we're getting into a mode of phasing.
Looking for the first thing diagnosing really carefully what the what the what the fifth step the highest value is for our clients getting that done and quickly so that they get the value faster and then applying that value again.
The rest of the agreed roadmap of rollout, which can be 2345 phases of rollout because most of our clients do need pretty much everything we do.
And so getting that agreement upfront with new clients and getting in and talking to our existing clients about having an agreed roadmap in forecasting out what their requirements might look like obviously, obviously gives us a lot of predictability around those.
Those expansion deals.
But it takes dedicated resources.
Again, the go to market requires client success managers, who can walk that line between being focused.
In a very wide clubs weigh on ensuring that our clients are getting everything they need and they get into success and they are using the software and they are getting value, but also sitting down with them and saying look you've got an opportunity to put a roadmap in place to to consume more software and and articulate the value of that they need to they need to be able to Omar.
Get into that trusted advisor status and be able to be able to sit down with clients and build out those future Roadmaps and I think we've got dedicated resource around that now and.
It is having a good effect.
Got it that makes perfect sense. Thanks, Paul I appreciate it.
Thank you.
Your next question will come from John Chow had National Bank. Please go ahead.
Hey, guys. Thanks for taking my question I just wanted to go to more understanding of your perpetual license.
Yes.
And you just mentioned.
Okay.
Okay.
Sorry, John I could then.
So we're getting getting we're getting one out of three wood.
Okay.
Is it better now.
I think so.
Okay I just wanted to get an understanding of the perpetual license revenue as Chris mentioned that was mainly due to the SaaS transition, but is there anything to do with the timing of those deals given that it can be bumpy sometimes.
Yes.
We had a Q2 last year you can see by the <unk>.
Size of the reduction year on year Q2 to Q2.
We had a big Q2 from a from a from a perpetual license point of view last year.
This year, we've had a substantial reduction and it's.
We don't necessarily get into the exact number of deals but.
It's only a couple of deals that make that swing, so and timing is obviously an issue as well.
If that deal lands before the 30 <unk> or.
Or the 13th of June in the quarter, if it lands on the July is in the following quarter. So those those single deals make a material difference to that.
License performance.
Okay got it and the other question for me is any.
Any updates on your customer churn rates don't minimum around zero.
Yes.
Ali for now okay.
Thank you I'll pass the line.
There are no further questions. So I will turn the conference back to Paul <unk> for any closing remarks.
Yes. Thank.
Thank you everybody great questions and we appreciate everyone joining us today.
Super excited about our ongoing business progress and the tremendous opportunity we have in front of us and we look forward to providing future updates as the year progresses.
Ladies and gentlemen, this does conclude your conference call for this afternoon, we would like to thank you all for participating and ask you to please disconnect your lines.
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