Q3 2023 Marchex Inc Earnings Call

Speaker 1: Good afternoon, and thank you for joining the March X 3rd quarter 2023 earnings call. My name is Kate, and I will be the moderator for today's call. All lines will be muted during the presentation portion of the call with a question and answer session at the end. I would now like to turn the call over to your host, Trevor Codswell, Senior Vice President of Strategic Initiatives and Investor Relations. You may proceed.

Good afternoon, and thank you for joining the March ex <unk> third quarter 2023 earnings call. My name is Kate and I will be the moderator for today's call.

All lines will be muted during the presentation portion of the call with a question and answer session at the end I would now like to turn the call over to your host Trevor Caldwell Senior Vice President of strategic initiatives and Investor Relations you May proceed.

Yeah.

Thank you Kate and good afternoon, everyone.

Speaker 2: Welcome to March X's business update in 3rd quarter of 2023 conference call. Joining us today are Edwin Miller.

Welcome to <unk> business update.

Third quarter 2023 conference call.

Joining us today are Alan Miller, our CEO.

Oh, Yeah, Oh, our Chief Financial Officer, Michael runs, our Vice Chairman before.

Speaker 2: Holly Aglio, our chief financial officer, Michael Rins, her vice chairman.

Speaker 2: Before we get started, I'd like to take this opportunity to remind you that our remarks today will include forward-looking statements, including references to our financial and operational performance, and actual results need different materially from those contemplated by these forward-looking statements.

Before we get started I would like to take this opportunity to remind you that our remarks today will include forward looking statements, including references to our financial and operational performance and actual results may differ materially from those contemplated by these forward looking statements.

Speaker 2: risks and uncertainties that could cause these results to differ materially, are set forth in today's earnings press release, and in our most recent annual and quarterly report, filed with the SEC.

Risks and uncertainties that could cause these results to differ materially are set forth in todays earnings press release and in our most recent annual and quarterly reports filed with the SEC.

Speaker 2: Any four looking statements that we make on this call are based on assumptions as of today. And we undertake no obligation to update these statements for subsequent events.

Any forward looking statements that we make on this call are based on assumptions as of today and we undertake no obligation to update these statements for subsequent events.

During this call we will present, both GAAP and non-GAAP financial measures reconciliation of GAAP to non-GAAP measures is included in today's earnings press release.

Speaker 2: During this call, we will present both GAP and non- GAAP financial measures. The reconciliation of GAP, canon- GAAP measures , is included in today's earnings press release.

Speaker 2: The earnings press release is available in the best-related section of our website. At this time, I want to turn the call over to Edward.

The earnings press release is available in the Investor Relations section of our website at this time I want to turn the call over to Evan.

Thank you Trevor and good afternoon to everyone.

Speaker 3: I'd like to thank you all for joining us today for quarterly earnings conference call. I'm pleased to share our progress with you during this period of transformation.

I'd like to thank you all for joining us today for our quarterly earnings Conference call.

I'm pleased to share our progress with you during this period of transformation.

I've been on the job for 275 days.

Speaker 3: and we are well in our way to positioning martishecks for long-term success.

And we're well on our way to positioning <unk> for long term success.

Speaker 3: We're building the culture that's highly committed in fostering innovation and collaboration. We can...

We're building a culture that is highly committed and fosters innovation and collaboration.

We continue to advance our technology.

In order to deliver new and powerful value creation for our customers and prospects.

Speaker 3: in order to deliver new and powerful value creation for our customers and customers.

And we are building out a world class team to tackle the robust market opportunities in front of us.

Speaker 3: and we are building out a world-class team to tackle the robust market opportunities in front of us. We are building out a world-class team to tackle the robust market opportunities in front of us.

We are moving back to the company.

Furthermore, I'm pleased to share that our progress has enabled us to achieve profitability sooner than expected.

Speaker 3: Furthermore, I'm pleased to share that our progress is enabled up to achieve profitability in their then expected. We are seizing on this momentum.

We are seizing on this momentum.

The big opportunity in front of us.

And that is.

Speaker 3: to increase our leadership and the conversational intelligence mark.

To increase our leadership in the conversational intelligence market.

Today I'd like to highlight three key initiatives that we believe will thrust us toward being a nine figure business in this space.

Speaker 3: Today, I'd like to highlight three key initiatives that we believe will thrust us toward being a nine-figure business in the space. These initiatives revolve around creating a world-class team.

These initiatives revolve around creating a world class team.

Streamlining and enhancing our technology.

And the formation of excellent in our go to market motion by vertical market.

Speaker 3: and the formation of excellence in our go-to-market motion by vertical market.

Let's look at our first initiative, which is building a world class team with a world class culture.

Speaker 3: Let's look at our first initiative, which is building a world class team with a world class culture.

When I arrived we have a high quality teams and our vertical markets with many years of experience.

Speaker 3: When I arrived, we had a high quality team in our vertical markets with many years of experience.

We organized towards shared services to empower our vertical market talent.

Speaker 3: We organize towards shared services to empower our vertical market talent. This has worked.

This has worked well with client engagement.

Further given how quickly the AI landscape has evolved.

Speaker 3: Further, given how quickly the AI landscape has evolved,

We have been adding to our talent pool in order to build toward the future and support our growth opportunities.

Speaker 3: We have been adding to our talent pool in order to build toward the future and support our growth opportunities.

We're investing in additional leadership and building out our data sciences, and AI team to leverage our vertical market understanding and death.

Speaker 3: We're investing in additional leadership in building out our data sciences and AI team to leverage our vertical market understanding and depth.

We know we need to move fast to advance our products and offerings.

Speaker 3: We know we need to move fast to advance our products and offers. And that is our

Embedded people make the difference.

Speaker 3: Thus, we are prioritizing and investing their talent to ensure we capitalize on a significant market opportunity and can harvest the revenue opportunities that will drive growth at the time.

Thus, we are prioritizing and investing in our talent to ensure recapitalized, our significant market opportunity.

And you can harvest the revenue opportunities that will drive growth over time.

Our second initiative.

Speaker 3: Folks are on continuing to optimize their technology stack to create a unified data pipeline and move about the technology stack.

Focuses on continuing to optimize our technology stack to create a unified data pipeline.

Move up the technology stack.

March ex possesses a well of conversational data across multiple channels and vertical markets.

Speaker 3: March X possesses a wealth of conversational data across multiple channels and vertical markets.

Speaker 3: This asset is a powerful differentiator and it holds incredible value for businesses, ranging from Fortune 500 companies to individual service providers. Our future is to continue toward one data pipe, one staff, one Marchx culture. This is a very powerful differentiator and it holds incredible value for businesses, ranging from Fortune 500 companies to individual service providers.

This asset is a powerful differentiator and it holds incredible value for businesses ranging from fortune 500 companies.

Individual service providers.

Our future is to continue toward one data.

Once that.

One <unk> culture.

Advanced AI math model tailored to our vertical market clients.

Advanced data analytics.

Speaker 3: and creating more AI signals that will allow our clients to derive an end-to-end due of a lead to the client, as well as improving the...

And creating more signals that will allow our clients to derive an end to end view of a lead to a client.

As well as improving the overall client experience.

We are in the flow of over 8 billion minutes of conversational data.

Speaker 3: We are in the flow of over a billion minutes of conversational data.

And the potential for mission critical insights for businesses is boundless.

Speaker 3: and the potential for mission critical insights for businesses is down.

Speaker 3: Moving to one data pipeline and one technology stack continues to be a significant focus for the business. And we believe it is one that will accelerate our product pipeline and seed innovation in the new world of generative AI.

Moving to one data pipeline and.

In one technology stack continues to be a significant focus for the business and.

And we believe it is one that will accelerate our product pipeline and Steve innovation.

In the new world of generative AI.

Given the increased efficiency. We also see these moves as leading to the potential for significant margin improvement in the business overtime.

Speaker 3: We also see these moves as leading to the potential for significant margin improvement in the business over time.

Okay.

Speaker 3: Our third initiative, folks, is on strengthening our vertical go-to-market approach.

Our third initiative focuses on strengthening our vertical go to market approach.

Speaker 3: We need to leverage all that we've accomplished in the past in building strong relationships with some of the largest companies in the world.

Need to leverage all that we've accomplished in the past and building strong relationships with some of the largest companies in the world.

Speaker 3: This will help us create new relationships in the coming quarters within our selected vertical markets, as well as accelerate sales growth through our go-to-market motions and product marketing strategies.

This will help us create new relationships in the coming quarters within our selected vertical markets as well as accelerate sales growth through our go to market motions and product marketing strategy.

All of this should be done in tandem with and on the backups are moving to a clean one stack of software, which enables us to innovate with new automation tools or.

Speaker 3: All of this should be done in tandem with and on the back of our moving to a clean one stack of software, which enables us to innovate with new automation tools for increasingly efficient onboarding of clients.

We're increasingly efficient onboarding of clients.

These efforts will enable our clients to deliver great customer experiences.

Speaker 3: These efforts will enable our clients to deliver great customer experiences.

While allowing us to expand our API capabilities.

Speaker 3: while allowing us to expand our API capabilities, which we are continually working to improve as part of our integration initiatives. Every day I'm in this role, I'm reminded of one thing.

Which we are continually working to improve as part of our integration initiatives.

Every day I'm in this role I am reminded of Wednesday.

We are at a pivotal moment in history.

The rapid evolution of AI is changing the game.

Speaker 3: It is poised to usher in significant change at every level of human interaction.

It is poised to usher insignificant change at every level of human interaction.

We're ready.

Speaker 3: March X lives in vertical markets with unique and rich data.

March ex lifts and vertical markets with unique and rich data.

Speaker 3: versus a thin horizontal approach to the market.

Versus a thin horizontal approach to the market.

We strongly believe that the vertical position as the best place to be within the market.

Speaker 3: I strongly believe that the vertical position is the best place to be within the AM market.

Creating a single efficient data pipeline will harm us with the powered unleash deeper and more meaningful insights at scale, we've never seen before.

Speaker 3: Creating a single efficient data pipeline will arm us with the power to unleash deeper and more meaningful insights at a scale we've never seen before.

Speaker 3: our customers will up-level their abilities to understand and engage their customers in ways they too have never seen before.

Our customers will up level their ability to understand and engage their customers in ways. They too have never seen before.

Speaker 3: On that note, I want to share that we recently launched new AI features to our expanding conversational intelligence software.

On that note.

I want to share that we recently launched new AI features to our expanding conversational intelligence software suite.

Speaker 3: AI call summary and AI sentiment suite are the first of our expanding guaranteed AI driven capability.

AI cost summary, and AI sentiment suite are the first of our expanding Janssen AI driven capabilities.

There will be more to come.

AI AI cost them leverage the power of generative AI to transform the way business is capture and utilize critical insights from customer interactions.

Speaker 3: AI call summaries leverage the power of generative AI to transform the way businesses capture and utilize critical insights from customer interaction.

Speaker 3: This technology gives concise, natural language descriptions of what occurred on a call between a consumer and a business.

This technology gives concise natural language descriptions of what occurred on a call between the consumer and a business.

Speaker 4: Decimate Suite combines structured and unstructured data.

Definite suite combined structured and unstructured data.

To provide a holistic view of customer emotions during conversations.

Speaker 4: to provide a holistic view of customer emotions during a conversation.

The possibilities in helping businesses to understand and meet the emotions of the customers. They engage a business will help sales close rates and we believe will drastically improve the customer experience.

Speaker 4: The possibilities in helping businesses to understand and meet the emotions of the customer as they engage a business will help sales close rates and we believe will drastically improve the customer experience.

Speaker 4: These can be powerful insights for businesses to understand and engage consumers.

These can be powerful insights for businesses to understand and engage consumers.

Speaker 4: Our commitment to AI is a driving force and can unlock the potential for our business on a vast scale. It can help our customers foster better relationships with their consumers and drive meaningful revenue growth.

Our commitment to AI as a driving force and can unlock the potential for our business on a vast scale it.

It can help our customers foster better relationships with their consumers and drive meaningful revenue growth.

Speaker 4: That's why right now we are laser focused on the one data pipeline and one stack initiative.

That's why right now we are laser focused on the one data pipeline and one stack initiatives.

Speaker 4: In fact, we expect this effort to accelerate our ability to deliver new features and products to our customers.

And in fact, we expect this effort to accelerate our ability to deliver new features and products to our customers.

Speaker 4: and enable March X to cross up in ways that in the past were not possible.

And enabled <unk> to cross sell and ways that in the past were not possible.

We believe this to be an essential step towards accelerating growth and building a nine figure revenue business in the future.

Speaker 4: We believe this to be an essential step toward accelerating growth and building a nine-figure revenue business in the future.

Conversational intelligence is a multi billion dollar market.

Speaker 4: Conversational intelligence is a multi-billion dollar market.

Speaker 4: March X has a significant advantage in several vertical.

March X has a significant advantage in several verticals.

Speaker 4: as we have industry meeting customers with multi-year contracts through our asking us for more.

We have industry, leading customers with multi year contracts, who are asking us for more.

Speaker 3: The initiatives I've outlined will enable us to grow at rates that meet this demand over time and deliver a compelling margin profile to the business. I'm excited about where we are and also where we're headed. We have a clear.

The initiatives I've outlined will enable us to grow at rates that meet this demand overtime and deliver a compelling margin profile to the business.

I'm excited about where we are and also where we're headed we had a clear vision.

And we are moving quickly and thoughtfully in all areas of our business.

While some of these efforts will take time I am mindful that we still expect to deliver a compelling financial profile as we built while keeping an open mind to all potential strategic initiatives that can help us unlock the value of March acts.

Speaker 4: While some of these efforts will take time, I am mindful that we still expect to deliver a compelling financial profile as we build, while keeping an open mind to all potential strategic initiatives that can help us unlock the value of March.

I look forward to updating you on our progress next quarter.

Speaker 4: I look forward to updating you on our progress next quarter. With that, I am so excited to welcome the newest member of our team, Holly Aglio. She will walk you through our.

With that I am so excited to welcome the newest member of our team how the <unk>. She will walk you through our financials.

Speaker 5: Thank you, Edwin. I am thrilled to have joined March X at this time.

Thank you Edwin.

I am thrilled to have joined <unk> at this time.

Speaker 5: For the third quarter, revenue was $12.8 million versus $12.5 million in the second quarter and $13.2 million for the same quarter last year.

For the third quarter revenue was $12 8 million versus $12 5 million in the second quarter.

$13 $2 million for the same quarter last year.

Speaker 5: From a revenue perspective on a year over year basis, we saw expansion in some key verticals with the auto vertical continuing to see growth while we saw continued pressure on conversation volumes. On a year over year basis with our small business listing and solution providers that mostly sell marketing services to local businesses.

From a revenue perspective on a year over year basis, we saw expansion in some key vertical with the auto vertical are continuing to see growth. While we saw continued pressure on conversation volume on a year over year basis, what our small business listing and solution providers that mostly saw marketing services.

All businesses.

Speaker 5: In the auto vertical, we continue to see expansion of our dealer channel and of our OEM relationship as a key driver of growth.

In the auto vertical we continue to see expansion of our dealer channel.

Our OEM relationship as a key driver of growth.

Our ability to win new relationships.

Speaker 5: our ability to win new relationships and extend others into multi-year terms has contributed to MarchEx's expanding footprint in this vertical.

And extended others and some multiyear terms has contributed to some of our Texas expanding footprint in this vertical.

In addition, we see significant potential to expand some of our products into verticals that have similar characteristics.

Speaker 5: In addition, we see significant potential to expand some of our products into verticals that have similar characteristics and where we already have relationships with many of the vertical market leaders.

And where we already have relationships with many of the vertical market leaders.

Speaker 5: For example, in the home services vertical, we see expansion of key relationships being helpful to our overall profile.

For example in the home services vertical we see expansion of key relationships being helpful to our overall profile.

Turning to the P&L for the third quarter.

Excluding stock based compensation.

Speaker 5: excluding stock-based compensation, amortization of intangible assets, and acquisition and disposition-related costs. Total operating costs for the third quarter were $13.2 million, compared to $13.6 million for the third quarter of 2022.

Amortization of intangible assets.

And acquisition and disposition related costs.

Total operating costs for the third quarter were $13 $2 million.

Turkey was $13 $6 million for the.

Third quarter of 2022.

Speaker 5: During the quarter, we incurred certain costs associated with reorganizing and modifying operating activities, totaling approximately 300,000 dollars.

During the quarter.

We incurred certain cost.

You hit them with reorganizing and modifying operating activity.

Approximately $300000.

Speaker 5: Service costs were $5.1 million for the third quarter, which decreased as a percentage of revenue from the second quarter of 2023.

Service costs were $5 $1 million for the third quarter.

<unk> decreased as a percentage of revenue from the second quarter of 2023.

Over time, we expect our service costs as a percentage of revenue May decrease as a result of our current technology infrastructure initiatives.

Speaker 5: Over time, we expect our service costs as a percentage of revenue may decrease as a result of our current technology infrastructure initiative.

Speaker 5: That should enable an overall improvement with our service cost margin as we sell through our new conversational intelligence product and advance our vertical market initiative.

That should enable an overall improvement with our service cost margin.

We sell through our new conversational intelligence product.

And advance our vertical market initiatives.

Sales and marketing costs were approximately $2 2 million for the third quarter.

Speaker 5: Sales and marketing costs were approximately $2.2 million for the third quarter.

This was down from the prior comparative period in large part as a result of the reorganizing initiatives.

Speaker 5: This was down from the prior comparative period in large part as a result of the reorganizing initiative.

Product development.

Speaker 5: Product development costs were $4 million for the third quarter, as we continue to invest in our products and in building AI to expand our conversational intelligence capabilities. Caleb Colligation is doing a hundred thousand tools for technology to harness their ability.

$4 million for the third quarter as we continue to invest in our products and in building AI and our conversational intelligence capabilities.

Moving to profitability measures adjust.

Speaker 5: adjusted operating loss before amortization for the third quarter with $400,000.

Adjusted operating loss of foreign amortization for the third quarter with $400000.

Speaker 5: corresponding adjusted EBITDA was a gain of approximately $370,000.

Corresponding adjusted EBITDA was a gain of approximately $370000.

Speaker 5: These amounts include approximately $300,000 for certain costs associated with reorganizing and modifying operating activities.

These amounts include approximately $300000 for certain costs associated with reorganizing and modifying operating activities.

Excluding those amounts adjusted EBITDA would have been approximately $670000.

Speaker 5: Excluding those amounts, adjusted EBITDA would have been approximately $670,000.

GAAP net loss was $1 $5 million for the third quarter or four cents per diluted share.

Speaker 5: Gap net law was $1.5 million for the third quarter or four cents per diluted share.

This compares to a loss of $1 $6 million or four cents per diluted share for the third quarter of 2022.

Speaker 5: This compares to a loss of $1.6 million, or $0.04 per diluted share, for the third quarter of 2022.

Speaker 5: adjusted non-gap loss was one cent per share for the third quarter compared to a loss of one cent per share for the third quarter of 2022.

Adjusted non-GAAP loss was one cent per share for the third quarter compared to a loss of one cents per share for the third quarter of 2022.

Speaker 5: Additionally, we ended the third quarter with approximately $13.7 million in cash on hand.

Additionally, we ended the third quarter with approximately $13 $7 million in cash on hand.

Now turning to our outlook.

We believe revenue in the fourth quarter of 2023 should be at or near third quarter level.

Speaker 5: We believe revenue in the fourth quarter of 2023 should be at or near third quarter level.

Speaker 5: While the fourth quarter has historical, seasonal downward volumes trend, and there are some headwinds in certain verticals previously mentioned, we believe those factors should be offset by the growth driven by new customer adoption and onboarding a previously one relationship over the course of the year.

While the fourth quarter has historical seasonal downward volume trend and there are some headwinds in certain vertical previously mentioned.

We believe those factors should be offset by the growth driven by new customer adoption and the on boarding of previously one relationship over the course of the year.

In addition, we continue to believe that our traction within the automotive vertical can lead to double digit growth on an annualized run rate year over year basis by the end of 2023 within that vertical.

Speaker 5: In addition, we continue to believe that our traction within the automotive vertical can lead to double-digit growth on an annualized run rate year over year basis by the end of 2023 within that vertical.

With that progress in mind, we believe that we will continue to be above breakeven on an adjusted EBITDA basis in the fourth quarter.

Speaker 5: With that progress in mind, we believe that we will continue to be above break even on an adjusted EBITDA basis in the fourth quarter.

As we look to 2024 based on current progress with current and new customers.

Speaker 5: As we look to 2024, based on current progress with current and new customers, we anticipate revenue growth on a year-over-year basis, with sequential progress throughout the year.

We anticipate revenue growth on a year over year basis with sequential progress throughout the year.

Furthermore.

Speaker 5: our current initiative to move to one data pipe and other cost savings initiatives in tandem with expected future revenue growth initiatives should enable greater operating leverage in the business and consequently we could see improvements in profitability measures in the future.

Our current initiative to move to one data pipe and other cost savings initiatives in tandem with expected future revenue growth initiatives.

That enable greater operating leverage in the business.

And consequently, we could see improvement and profitability measures in the future.

Speaker 5: For 2024, we anticipate adjusted EBITDA to be above break-evens throughout the year. I'd like to pass the call back to Edwin.

For 2024, we anticipate adjusted EBITDA to be above breakeven throughout the year.

I'd like to pass the call back to Edmond for closing remarks.

Thank you Holly.

Speaker 3: Since I've joined March X, we've accomplished a lot over a short period of time. We've achieved profitability.

Besides joined <unk>, we've accomplished a lot over a short period of time.

We've achieved profitability earlier than planned.

Speaker 3: put in place a series of initiatives that will enhance the profitability profile of the business well into the future.

And put in place a series of initiatives that will enhance the profitability profile of the business well into the future.

Speaker 4: In addition, we're supplementing the team with world-class talent that will be the driving force for growth as we launch our go-to-market initiative in the coming quarters.

In addition, we're supplementing that team with World class talent that will be the driving force for growth as we launch our go to market initiatives in the coming quarters.

I've been a part of a lot of technology companies and I'm excited about what I see here at March yes.

Speaker 3: I've been a part of a lot of technology companies, and I'm excited about what I see here at Martin.

Speaker 4: We have an incredible group of world-class customers who are asking us to do more.

We have an incredible group of World class customers, who are asking us to do more.

We have a world class team that we are continuing to build out.

Speaker 3: We have a world-class team that we are continuing to build out.

Just as importantly, we have an underlying data asset that makes the company truly unique with lots of value to unlock the many ways to do so.

Speaker 4: Just as importantly, we have an underlying data asset that makes the company truly unique with lots of value to unlock and many ways to do so.

AI is here.

Speaker 4: Possibility to continue transforming the conversational intelligence market represents a significant and growing opportunity as AI continues to evolve.

Its possibilities to continue to transform the conversational intelligence market represent a significant and growing opportunity as AI continues to evolve.

In the meantime.

Speaker 4: We have a clear view of when it locks the potential of Marcheck.

We have a clear view of what unlocks the potential of March ex <unk>.

Speaker 4: Further, we have a path for growing a sustainable and increasingly profitable business. We will continue investing.

Further we have a path for growing a sustainable and increasingly profitable business.

We will continue investing.

Industry, leading AI capabilities.

Speaker 3: I want to thank the teams for their hard work. I look forward to accomplishing great things together. Thank you for your time today. With that said, operator, let's move to questions.

I want to thank the team for their hard work.

I look forward to accomplishing great things together. Thank you for your time today with that said operator, let's move to your questions.

Thank you we will now begin the question and answer session. If you would like to ask a question. Please press star followed by a one on your telephone keypad.

Speaker 1: Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star followed by A1 on your telephone keypad. If for any reason you would like to remove your question, please press star followed by A2. As a reminder, if you were using a speaker phone, please remember to pick up your handset before asking your question. Again, to ask a question is a star followed by A1 on your telephone keypad.

If for any reason you would like to remove your question. Please press star followed by a two as a reminder, if you were using a speaker phone. Please remember to pick up your handset before asking your question again to ask a question that is star followed by a one on your telephone keypad.

The first question will be from the line of Mike Latimore with Northland Securities. Your line is now open.

Speaker 1: The first question will be from the line of Mike Latimore with Northland securities. Your line is now open.

Okay.

Hi, This is Logan on for Mike.

Speaker 6: Could you guys talk about how call volumes trended in October versus what you saw in Q3?

You guys talked about how call volumes trended in October versus what you saw in Q3.

Hey, Logan this is Mike here.

Okay.

Speaker 7: or just for reference, call volumes from a seasonal perspective are consistent with what we've seen in prior years. Usually the downward trend is primarily in the November to December . Time frame around the holiday starting more heavily in the holiday timeframe. There is a seasonal adjustment that does start in the latter part of September , but the heavier part of the downward trend in the fourth quarter is generally around that holiday time.

So just for reference call volumes and from a seasonal perspective are consistent with what we've seen in prior years, usually the the downward trend is primarily in the November December.

Time frame around the holiday starting more heavily in the holiday timeframe.

There is a seasonal adjustment that does start in the latter part of September but the heavier part of the downward trend in the fourth quarter is generally around the holiday timeframe.

Speaker 7: So we've seen consistency in general across that, but we also have a number of new customers in relationship items that are.

So we've seen consistency.

In general across that but we also have a number of new <unk>.

Customers and relationship items that are expanding as well as some of the new on boardings and those are helping us.

Speaker 7: expanding as well as some of the new onboarding and those are helping us offset some of the total revenue sequential movement where we think we're still going to be at or very near the levels that we were on the third quarter.

Offset some of the total revenue sequential movement, where we think we're still going to be at or very near the levels that we were in the third quarter.

Perfect. Thank you and then on that.

Speaker 6: Perfect, thank you. And then I'll more question, could you talk about the electric vehicle category and how important that is the growth driver going forward?

One more question can you talk about the electric vehicle category and how important that is the growth driver going forward.

Speaker 7: So this is Logan. This is Mike again automotive it's it's trending well for us. It's a key part of The overall framework of where we think we're going to be headed on a go for basis and just echoing some of Edwin's and Holly's comments there. There's a lot of

So.

This is Logan this is Mike again.

Automotive, it's trending well for us it's a key part of.

The overall framework.

Where we think we're going to be headed on a go forward basis, and just echoing some of headwinds and holidays comments. There there is a lot of.

Speaker 7: new product activity that we have, especially related to some of the generative AI activity, and how that can play out and benefit our customers, but particularly in auto with the EV movement. EV is simply an incredibly intricate and diverse arena that the auto dealers, as as well as the ONM's are working through. It's giving momentum in the part for us.

New product activity that we have especially related to some of the generative AI activity and how that can play out and benefit our customers, but particularly in auto with the EV movement EV, it's simply an incredibly Andrew.

Inter kit and the diverse arena that the auto dealers as well as the Oems are working through is giving momentum in the part for us.

Speaker 7: because it's driving industry needed change to be able to deal with the critical challenges of an electric vehicle world. And if you think about intricate

It's driving industry needed change to be able to deal with the critical challenges of an electric vehicle world and if you think about intricacies and differences.

Speaker 7: It's demanding data intelligence, it's demanding sentiment, it's demanding signals and insights. And importantly, identification of trends and movements, quickly and in real...

Demanding data intelligence, it's demanding sentiment depending signals of insights and <unk>.

Accordingly identification of trends and movements quickly and in real time.

Speaker 7: We are in a position with a powerful solution where we can help with that across all types of conversations, whether it be voice, text, chat.

We're in a position with a powerful solution, where we can help with SAP across all types of conversations whether it be voice text chat.

Speaker 7: as well as other forms of conversations and engagement with prospects and customers.

Prospectively as well as other forms of conversations and engagement with prospects and customers.

And it's not just the automotive arena that we're seeing some of the <unk> application and we've got some very deep and strong relationships with Oems in the auto vertical we've expanded some of those relationships lending multi year extensions, we've on boarded some new ones, but we have some other very relevant relationships.

Speaker 7: It's not just the automotive arena that we're seeing some of this application and we've got some very deep and strong relationships with OEMs in the auto vertical. We've expanded some of those relationships, landing multi-year extensions. We've onboarded some new ones.

Speaker 7: We have some other very relevant relationships and other verticals and the applicability of the product, two other verticals. Edwin spoke about this in some of the prepared commentary. We think there's some replication here that we can do in the coming periods with home services, with auto services and healthcare to name a few because those are a few that we already have some very entrenched and strong relationships with large conglomerates.

In other verticals and the applicability of the product to other verticals Edwin spoke about this in some of the prepared commentary, we think theres. Some replication here that we can do.

In the coming periods with home services with auto services and.

In healthcare to name a few because those are a few that we already have some very entrenched and strong relationships with large conglomerates.

Speaker 7: that are relatable to some of the work that we've been doing in the auto-sector.

<unk> related to some of the work that we've been doing in the auto sector.

Okay.

Speaker 4: Yeah, no. This is that one. I'll add to that. I'll add to that good question. And it's a very relevant and germane question on timing. The what we're seeing and we've got a team out in the auto land this week. And the conversations around EV are hot. Everybody's trying to get there. And if you just think about the two things we just launched with AI features around AI call summaries and AI sentiment.

Yes.

What I'll add to that.

Is it that good question and it's a very relevant and germane question on timing.

The what we're seeing and we've got the team out.

Auto land this week and the conversations around E D R.

Hot everybody trying to get there and if you just think about the two things. We just launched with AI features around AI call summaries and AI sentiment.

Speaker 3: Think about you walk into a dealership and then the sales people are used to selling.

Think about do you walk into a dealership.

And the sales people are used to selling gas or diesel and now they got to answer questions and understand how to sell EV. The question set is different and so understanding the summary of the call and the sentiment of the call and getting ahead of that and being able to foster intelligent conversations at the dealership Levy.

Speaker 4: gas or diesel. And now they got to answer questions and understand how to sell EV. The question set is different. And so understanding the summary of a call and the sentiment of a call and getting ahead of that.

Speaker 3: and being able to foster intelligent conversations at the dealership level and for our large OEMs is powerful.

And for our large Oems is is powerful.

Speaker 7: But again, I'll echo what Mike said. It's not just in the auto mode of Vertical what we found since I've joined have been on 275 days counting weekends because I ended up working on weekends too, but

But again I'll Echo what Mike said, it's not just in.

The auto motive.

Vertical what we found since I've joined has been on 275 days counting weekends, because I ended up working on we can stupid.

Is that.

The the need of technology.

Speaker 3: the need of technology and what we provide.

And what we provide.

From numbers too.

Speaker 4: to tech, to chatbots, to the ability not even to have a number and ingest data, it's required across any B2C complex ecosystem and it creates very rich deep vertical market data which allows us to build new math models faster than other companies and allows us to help, I think get a half.

Text to chat bot to the ability not even have a number and ingest data it's required across any b to b to C complex ecosystem.

And it creates very rich deep vertical market data, which allows us to build new math models faster than other companies and allows us to help.

I think get ahead of what is going to be needed based on understanding. This conversation. So we can also become a predictive analytics platform versus prescriptive I think most of the company companies out there live in a prescriptive world Hey, Here's what happened yesterday.

Speaker 3: is going to be needed based on understanding those conversations. So we can also become a predictive analytics platform versus prescriptive. I think most of the companies out there live in a prescriptive world. Hey, here's what happened yesterday. Oh, thank you. I got run over by a car where we want to live is in a world where we tell you the car.

Thanks, Yeah, I got run over by a car.

We went to live isn't a world, where we tell you the Carson.

Speaker 3: So I hope that helps, but we're excited about the easy but

So I I.

I hope that helps but we're excited about the easy but.

We're also excited about all the verticals and the commonality of the needs that gets the verticals we serve.

Speaker 4: We're also excited about all the verticals and the commonality of the needs against the verticals we serve.

Yes. Thank you that was very helpful. Congrats on the quarter guys.

Thank you at this time there are no further questions registered in the queue. So I will turn the call back over to the management team for final closing remarks.

Speaker 1: Thank you. At this time, there are no further questions registered in the queue. Well, I will turn the call back over to the management team for our final closing remarks.

Okay, well I would like to thank everyone, who joined we thank you for your time interest in our business and we look forward to updating you in the future and we're here to grow the business. So thank you so much for your time appreciate it.

Speaker 3: Okay, well I would like to thank everyone who joined. We thank you for your time, interest in our business, and we look forward to updating you in the future, and we're here to grow the business, so thank you so much for your time. Appreciate it.

That concludes today's conference call. Thank you all for your participation and you may now disconnect your lines.

Speaker 1: That concludes today's conference call. Thank you all for your participation and you may now disconnect your lines.

Yes.