Q4 2023 Enghouse Systems Ltd Earnings Call
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Good morning, ladies and gentlemen, and welcome to Ench House's fourth quarter and year-end results conference call.
Good morning, ladies and gentlemen, and welcome to Entellus This fourth quarter and year end results conference call. At this time all lines are in a listen only mode.
At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star 0 for the operator. This call is being recorded on Friday, December 15, 2023. I would now like to turn the call over to Mr. Stephen Sandler, Chairman and CEO . Please go ahead.
Following the presentation, we will conduct a question and answer session. If at any time. During this call you require immediate assistance. Please press star zero for operator. This call is being recorded on Friday December 15, 2020, I would now like to turn the call over to Mr. Stephen Sadler Chairman and CEO. Please go ahead.
Yeah.
Good morning, everybody. I'm here today with Vince Muffsood, Global President, Rob Medved, VP Finance, and Todd May VP Legal Counsel. Before we begin, I'll have Todd read our forward disclaimer.
Good morning, everybody I'm here today with <unk>.
Stephen Sadler: Global President, Rob <unk>, VP finance, and Todd May VP legal counsel.
Stephen Sadler: Before we begin I'll have Todd read our forward disclaimer.
Certain statements made may be forward looking by their nature. Such forward looking statements are subject to various risks and uncertainties, including those in end-chosen continuous disclosure filing such as AIF, which could cause the company's actual results and experience to different materially from anticipated results or other expectations.
Todd: Certain statements made may be forward looking by their nature such forward looking statements are subject to various risks risks and uncertainties, including those in <unk> continuous disclosure filings, which could cause the company's actual results and experience to differ materially from anticipated results or other expectations undue reliance should not be placed on forward looking information and the company has no obligation.
Under real-alien should not be placed on quote-word looking information and the company has no obligation to update or revise any forward looking information, whether as a result of new information future events or other. Thanks Todd. Rob will now give an overview of the financial results.
Todd: To update or revise any forward looking information, whether as a result of new information future events or otherwise.
Todd: Yes.
Speaker Change: Thanks, Todd Rob will now give an overview of the financial results. Thanks, Steve.
Good morning. I will be taking us through the financial highlights for the three and 12 months ended October 31st, 2023, compared to the three and 12 months ended October 31st, 2022, as follows. Revenue increased to 123.1 and 454 million respectively, compared to revenue of 108.1 and 427.6 million.
I will be taking us through the financial highlights for the three and 12 months ended October 31, 2023 compared to the three and 12 months ended October 31, 2022 as follows revenue increased to $123, one and $454 million, respectively compared to revenue of 108.
Speaker Change: One and $427 6 million results from operating activities were $35, seven and $122 1 million, respectively compared to $33, one and $129 7 million net income was $25, one and $72 2 million, respectively compared to 36.
Results from operating activities were 35.7 and 122.1 million respectively, compared to 33.1 and 129.7 million.
Net income was $25.1 million and $72.2 million respectively, compared to $36.9 million and $94.5 million.
Speaker Change: Nine and $94 5 million.
Adjusted EBITDA was 37.9 and 133.8 million respectively compared to 35.8 and 140.6 million. Cash flows from operating activities, excluding changes in working capital, was 43.5 and 140.5 million respectively compared to 37.7 and 145.1 million.
Speaker Change: <unk> EBITDA was $37 nine and $133 8 million, respectively, compared to 35, eight and $146 million cash flows from operating activities. Excluding changes in working capital was $43, five and $140 5 million, respectively compared to 37, 7%.
Speaker Change: $145 1 million.
In fiscal 2023, we achieved a significant milestone by expanding our revenue, increasing our cash reserves, and also deploying 55.2 million on acquisition.
Speaker Change: In fiscal 2023, we achieved a significant milestone by expanding our revenue increasing our cash reserves and also deploying $55 2 million on acquisitions. We are pleased to announce record annual SaaS and maintenance services revenue of $297 6 million, an increase of $39 4 million or <unk>.
We are pleased to announce record annual SAS and maintenance services revenue of 297.6M, an increase of 39.4M or 15.2% compared to the prior year. SAS and maintenance services are an important strategic source of revenue characterized by their predictable and recurring nature.
Speaker Change: 15, 2% compared to the prior year SaaS and maintenance services are an important strategic source of revenue characterized by the predictable and recurring nature.
They now represent 65.6% of total revenues for the year compared to 60.4% in the prior year.
Speaker Change: They now represent 65, 6% of total revenues for the year compared to 64% in the prior year.
The growth in revenue was accomplished through the expansion of a recurring fast revenue base, holstered by new revenues from Q, Navada, and life size, all of which were acquired and successfully integrated in fiscal 2023, combined with positive impacts from foreign exchange rates in the year. This positive momentum was somewhat offset by declining software license revenue, as we see increasing customer preference for SaaS solutions.
Speaker Change: Growth in revenue was accomplished through the expansion of our recurring SaaS revenue base bolstered by new revenues from Q, Nevada in Lifesize, all of which were acquired and successfully integrated in fiscal 2023 combined with positive impacts from foreign exchange rates in the year. This positive momentum was somewhat offset by declining <unk>.
Speaker Change: Software license revenue as we see increasing customer preference for SaaS solutions aligned with our commitment to provide our customers choice. We are actively broadening the global availability of our SaaS offerings, particularly in our customer experience and contact center technologies, where demand for SaaS is growing despite the <unk>.
Aligned with our commitment to provide our customers' choice, we are actively broadening the global availability of our SaaS offerings, particularly in our customer experience and contact-sender technologies where demand for SaaS is growing. Despite the industry shift, we remain profitable, reporting results from operating activities of 122.1 million.
Speaker Change: Three shift we remained profitable reporting results from operating activities of $122 1 million with.
With cash reserves of $240.4 million and no external debt, we continue to actively pursue opportunities to strategically deploy our cash reserves on acquisitions and return cash to our shareholders in the form of dividends.
Speaker Change: With cash reserves of $240 4 million and no external debt, we continue to actively pursue opportunities to strategically deploy our cash reserves on acquisitions and return cash to our shareholders in the form of dividends yes.
Yesterday, the Board of Directors approved the company's eligible quarterly dividend of 22 cents per common share, payable on February 29th, 2024, to shareholders of record at the close of business on February 15th, 2024. I will now hand the call back to Mr. Sander.
Yesterday, the board of directors approved the company's eligible quarterly dividend of 22 per common share payable on February 29, 2024 to shareholders of record at the close of business on February 15th 2024.
Speaker Change: I will now hand, the call back to Mr. Sadler.
This will now give some operational highlights of the quarter. Thank you Steve.
Sadler: This will now give some operational highlights of the quarter. Thank you Steve.
We are pleased to report double digit growth in Q423 compared to Q4 of 22 with total revenue growth of 13.9% recurring revenue growth of 35% and net cash flows from operating activities improving 52.8%.
Steve: We are pleased to report double digit growth in Q4 dollars 23, compared to Q4 of 22 with total revenue growth of 13, 9% recurring revenue growth of 35% and net cash flows from operating activities improving 52, 8%.
Once again, we have also demonstrated to be one of the most profitable companies in our market. If not, the outright leader in terms of profitability.
Steve: Once again, we have also demonstrated to be one of the most profitable companies in our market.
Steve: Not the outright leader in terms of profitability.
We achieved these results despite being faced with inflationary pressures in 2023.
Steve: We achieved these results despite being faced with inflationary pressures in 2023.
These results reflect the competitive advantage of our choice strategy, our good products, acquisitions, and how we integrate acquisitions.
Steve: These results reflect the competitive advantage of our choice strategy are good products acquisitions, and how we integrate acquisitions.
and the end-chosis team's ability to execute and continually find new ways to improve our business.
Steve: And the <unk> team's ability to execute and continually find new ways to improve our business.
Breakthroughs in 2023 in the field of generative artificial intelligence.
Steve: Brakes breakthroughs in 2023 in the field of generative artificial intelligence has prompted a lot of discussion in market awareness around AI.
has prompted a lot of discussion and market awareness around AI. So we thought that timing is appropriate to provide more detail in terms of what NCHELSE is doing in AI. We have...
Steve: So we thought the timing is appropriate to provide more detail in terms of what <unk> is doing in AI.
Steve: We have a two pronged AI strategy.
One is to provide our customers with AI products that add value to their business and generate additional revenue for Enchhouse.
Steve: One is to provide our customers with AI products that add value to their business and generate additional revenue French house.
And secondly, is to use AI tools to improve our overall internal operations that translates into improved profitability.
Steve: Secondly is to use AI tools to improve our overall internal operations that translates into improved profitability.
And trust has been developing an integrating AI technology since 2019, which commenced with the acquisition of Eptica, and our approach involves integrating leading AI technologies with our own proprietary AI innovation.
Speaker Change: Interest has been developing and integrating AI technology since 2019, which commenced with the acquisition of <unk>.
Speaker Change: And our approach involves integrating leading AI technologies with our own proprietary AI innovations.
When developing and constructing our AI products, certain foundational blocks were essential to build and create. And let me describe some...
Speaker Change: When developing and constructing our AI products certain foundational blocks were essential to build and create and.
Speaker Change: And let me describe some of these building blocks.
The N-chelle's transcription engine is a critical piece of software that translates phone calls and video recordings automatically into text.
Speaker Change: The <unk> transcription engine is a critical piece of software that translates phone calls and video recordings automatically into text.
This proprietary transcription technology is available in over 50 languages and represents one of our fundamental building blocks for AI.
Speaker Change: This proprietary transcription technology is available in over 50 languages and represents one of our fundamental building blocks for AI.
Advanced linguistic search is another proprietary building block.
Speaker Change: Languished link advanced linguistic search is another proprietary building block there.
This search capability enables us to go beyond simple keyword matching into broader language understanding.
Speaker Change: The search capability enables us to go beyond simple keyword matching into broader language understanding.
A third building block is the NCHOS knowledge base product that provides customers the ability to create their own proprietary data set derived from consuming multiple sources of internal content including emails, customer interactions, documents, and files.
Speaker Change: Third building block is the entrust knowledge based product that provides customers the ability to create their own proprietary dataset derived from consuming multiple sources of internal content, including emails customer interactions documents and files.
And this knowledge base provides the unique data set relevant to our customers' businesses.
Speaker Change: And this knowledge base provides the unique dataset relevant to our customers' businesses.
which is what both the generative AI engines need to generate applicable and relevant response.
Speaker Change: Which is what generative AI engines need to generate applicable and relevant responses.
With these core building blocks integrated with leading AI technologies, we have several AI products.
Speaker Change: With these core building blocks integrated with leading AI technologies, we have several AI products and plan additional future products that serve the needs of the enterprise market.
and plan additional future products that serve the needs of the enterprise market.
Speaker Change: Yes.
In a contact center environment, we think of AI primarily as a tool to improve the contact center agent's productivity.
Speaker Change: In a contact center environment, we think of AI, primarily as a tool to improve the contact center agents productivity.
As an example, our agent knowledge product provides the ability for an agent to ask questions to the knowledge base and retrieve helpful and relevant responses which can assist them when addressing customer questions.
Speaker Change: As an example, our agent knowledge product provides stability and the ability for an agent to ask questions to the knowledge base and retreat helpful and relevant responses, which can assist them when addressing customer questions.
Smart quality is our API-powered quality assurance product.
Speaker Change: Smart quality is our AI powered quality assurance product.
Contact Center interactions are typically recorded for quality assurance purposes, and smart quality automatically evaluates the performance of an agent, scores their performance, provides agent recommendations.
Speaker Change: Contact center interactions are typically recorded for quality assurance purposes, and smart quality automatically evaluates the performance of an agent scores their performance provides agent recommendations.
This saves supervisors many hours listening to recordings. We also have real-time coaching technology, which is used to help an agent while they're interacting with the customer, providing real-time suggestions by recognizing the customer's sediment during the conversation.
Speaker Change: This saves supervisors many hours listening to recordings. We also have real time coaching technology, which is used to help an agent while they're interacting with the customer providing real time suggestions by recognizing the customer sediment during the conversation.
Also, in most contact centers, after every customer interaction, agents need to manually summarize the call and the request.
Speaker Change: Also and most contact centers.
Speaker Change: After every customer interaction agents need to manually summarize.
Speaker Change: The call and the required action items.
This consumes a lot of time. Our conversational summarization product performs interaction summaries in a fully automated manner.
This consumes a lot of time, our conversational summarization product performs interaction summaries in a fully automated manner.
Virtual agents, also known as chatbots, use AI to respond to customer inquiries.
Speaker Change: Virtual agents also known as chat bots use AI to respond to customer inquiries.
freeing up the contact center agent to handle more complex interactions.
Speaker Change: Going up the contact center agents to handle more complex interactions.
When a chatbot is unable to respond to an interaction, our Engage product redirects the email or chat based on its content to the agent most suited to address the interaction.
Speaker Change: When a chatbot is unable to respond to an interaction.
Speaker Change: Engage product redirects, the email or chat based on its content to the agent most suited to address the interaction.
These are all examples of our AI tools that improve agent productivity. We also have AI in our.
Speaker Change: These are all examples of our AI tools that improve agent productivity.
Speaker Change: We also have AI in our video health care customers.
Video fall detection technology is being embedded into our virtual sitter application that helps healthcare professionals, monitors several patients simultaneously. This triggers alarms when a patient is falling or about to fall, which is used both in home and hospital patient monitoring.
Speaker Change: Video fall detection technology as being embedded into our virtual sidor application that helps health care professional professionals.
Speaker Change: Monitor several patients simultaneously.
Speaker Change: This triggers alarms when a patient is falling are about the fall, which is used both in home and hospital patient monitoring.
Within our emergency safety technology, AI is used to optimize the fastest route for a fire truck, police car, ambulance to the emergency incident, considering several variables and factors, such as vehicle size, traffic conditions, traffic lights. These are all aimed at helping self save people's lives.
Speaker Change: Within our emergency safety technology AI is used to optimize the fastest route for a fire truck police car ambulance to the emergency incident.
Speaker Change: During several variables and factors such as vehicle size traffic conditions traffic lights. These are all aimed at helping sell save People's lives.
In addition to offering AI products to our customers.
Speaker Change: And Additionally, in addition to offering AI products to our customers, which.
which we are still early on in terms of generating revenue, we're also leveraging AI within our operations to enhance efficiency.
Speaker Change: Which we are still early on in terms of generating revenue. We're also leveraging AI within our operations to enhance efficiency.
We started using AI in demand generation, area in 23 driving more inbound leads with the same level of spend. And in 2024 and future years, we plan on expanding AI across all areas of our company.
Speaker Change: We started using AI and demand generation area in 'twenty three driving more inbound leads with the same level of spend and in 2024 in future years, we plan on expanding AI across all areas of our company.
Turning now to acquisitions, our growth strategy continues to be expand profits both organically and through acquisitions.
Speaker Change: Turning now to acquisitions, our growth strategy continues to be expand profits, both organically and through acquisitions.
With acquisitions, a fundamental challenge lies in the post-acquisition integration process.
Speaker Change: With acquisitions of fundamental challenge lies in the post acquisition integration process in.
In 2023, all three acquisitions that were completed were effectively integrated.
Speaker Change: In 2023, all three acquisitions that were completed were effectively integrated.
transforming these companies from historical losses into profitability in the immediate quarter following each acquisition.
Speaker Change: Transforming these companies from historical losses into profitability in the immediate quarter following each acquisition.
The investments we made in technology and our improved internal capability have enhanced our ability to integrate acquisition.
The investments we made in technology, and our improved internal capability have enhanced our ability to integrate acquisitions.
Life size which we close at the start of Q4 was purchased out of bankruptcy and even with that complexity we managed to generate profits from this purchase immediately in the quarter.
Speaker Change: Lifesize, which we closed at the start of Q4 was purchased out of bankruptcy and even with that complexity, we managed to generate profits from this purchase immediately in the quarter.
As a reminder, we acquired certain assets of life size for a purchase price of 20.7 million US and employed approximately 70 former life size employees.
Speaker Change: As a reminder, we acquired certain assets of Lifesize for purchase price of $20 7 million U S and employed approximately 70, former lifesize employees.
While we demonstrated success in Q4, we always continue to explore new, innovative ways to improve our business, focusing on our products that we offer our customers, operational efficiency, acquisition and acquisition integration.
Speaker Change: While we demonstrated success in Q4, we always continue to explore new innovative ways to improve our business focusing on our products that we offer our customers operational efficiency acquisition and acquisition integrations.
I want to personally thank the team for their hard work and commitment during fiscal twenty three that made our success possible. Let me turn the call over.
Speaker Change: I want to personally thank the <unk> team for their hard work and commitment during fiscal 'twenty three that made our success possible. Let me turn the call over to Mr. Steve Sadler.
Thanks, Vince. Just a little bit more on acquisition.
Steve Sadler: Thanks Vince.
Steve Sadler: Just a little bit more on acquisitions just to remind you that Lifesize acquisition was completed August one and is in our full fourth quarter. It is performing as expected we announced the assets were purchased in a receivership process as Vince mentioned and with a lot of work it met our <unk>.
Just to remind you that life-size acquisition was completed August 1 and is in our full fourth quarter.
It is performing as expected. We announced the assets were purchased in a receivership process as Vince mentioned. And with a lot of work, it met our revenue and the EBITDAx expectations in the quarter. It's operating on our standard financial model already because some of the issues in a receivership process you can leave behind.
Revenue and EBITDA expectations in the quarter, it's operating on our standard financial model already because some of the issues in a receivership process you can leave behind.
Lifesized Business is nearly fully integrated with our Communications Center, Business and Video Business at the end of the fiscal year.
Steve Sadler: Lifesize business nearly fully integrated with our communications center business and video business at the end of the fiscal year.
I should also point out that without life size, our revenues approximate the same as the third quarter. There is no longer a large decline because the video, but there still is some decline because the video. So most of the revenue increase in Q4 came from the life size acquisition.
Steve Sadler: I'd also point out that without Lifesize, our revenues approximately same as the third quarter. There is no longer a large decline because the video but there still is some decline because of video. So most of the revenue increase in Q4 came from the life size acquisition <unk>.
acquisition opportunities remain at a high level as companies in our sector struggle with debt, high interest rates, and a slowing economy. I also should point out at life size, when you go through a receivership, some companies started looking long before we bought the company, and so we expect a slight revenue to climb in our life size business.
Steve Sadler: Acquisition opportunities remain at a high level as companies in our sector struggle with that high interest rates and a slowing economy. I also should point out at Lifesize. When you go through a receivership or some companies started looking long before we bought the company and so we expect a slot.
Steve Sadler: <unk> revenue decline in our Lifesize business.
Acquisition opportunities remain at a high level as companies in our sectors struggle with debt, high interest rates, and slowing economy as I previously stated. I would now like to open the call for questions.
Steve Sadler: Acquisition opportunities remain at a high level as companies in our sector has struggled with that high interest rates and slowing economy. As I previously stated I would now like to open the call for questions.
Steve Sadler: Yes.
Thank you. And ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press a star, followed by the number one on your telephone keypad. You will hear a telephone prompt acknowledging your request, and your questions will be pulled in the order you are received. Should you wish to decline from the polling process, please press a star, followed by the number two. And if you're using a speaker phone, please keep the hands up before pressing any keys. One moment please for your first question.
Speaker Change: Thank you and ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press star followed by the number one on your telephone keypad you will hear details from acknowledging your request and your questions will be bold in the order you received should you wish to decline from the calling process. These presses star.
Speaker Change: Biden Hombre Q and if you're using a speaker phone. Please keep your handset before pressing any Keith one moment. Please for your first question.
And your first question comes from the line of Stephanie Price from CADC Drillin is open.
Speaker Change: And your first question comes from the line of Stephanie price from CIBC. Your line is open.
Good morning. Congratulations on the life size acquisition and the quick integration there. Just wondering if you could kind of elaborate on the integration process and how much of it was the fact it was in receivership and how much of it was the fact that it seems like your integration process has kind of been refined here with Kimu and Navita and their life size.
Stephanie Price: Good morning, Congratulations on the Lifesize acquisition and the quick integration there.
Stephanie Price: I'm just wondering if you could kind of elaborate on.
Stephanie Price: The integration process and how much of it was with the pocket was in receivership and how much of it was the fact that it seems like your your integration process has.
Stephanie Price: It has kind of been refined here with Cumulus Davita and now Lifesize.
Yeah, we are improving, of course. The more type of deals you do, and we have some new people who are doing their first deal, but we've also some who have done many deals over the year.
Speaker Change: Yes, we are improving of course, the more type of deals you do and we have some new people who are doing their first deal, but we have also some who have done many deals over the years I would say that the process in receivership is quite different you get there faster.
I would say that the process in a receivership is quite different.
You get there faster, but it's a lot more work because you have to sign up the suppliers again.
Speaker Change: But it's a lot more work because you have to sign up the suppliers again, but you do not have to do a big hiring of staff and an exiting of staff you pick the staff you want and leave the remainder that maybe not fit what youre trying to do with the receiver. So again there are some advantages but.
But you do not have to do a big, you know, hiring a staff and exiting a staff, you pick the staff you want and leave the remainder that maybe not fit what you're trying to do with the receiver. So, again, there's some advantages, but the disadvantage is a lot more work, but you just don't buy something and have time.
Speaker Change: The disadvantages a lot more work because you just don't buy something and have time to sorted out you have to move quite quickly and that and that whole process. So it helped us get to profitability a lot faster. It's a very similar business that we have when we run differently in that it has video AD has contacts.
To sort it out, you have to move quite quickly in that whole process.
So it helped us get the profitability a lot faster. It's a very similar business that we have only run differently in that it has video and has contact center in the cloud.
Speaker Change: Center in the cloud.
Like many companies, they did the same mistake that we saw with video and others where they told their customers they had to go to the cloud. They're not selling on prem anymore. We stopped that. We will do both. It costs us a little bit more in R&D to do that, but we want to give the customers choice.
Speaker Change: Like many companies. They did the same mistake that we saw with video and others, where they told their customers. They had to go to the cloud they're not selling on Prem anymore. We stopped that we will do both it costs us a little bit more in R&D to do that but we want to give the customers choice.
That's helped and we believe the decline they saw in their revenue. We will still have some decline as people have already started looking, but we will have less decline and over the next couple of quarters we expect the lifestyles, revenue to stabilize and probably profitability could still grow a little bit, especially as a percentage of that revenue.
Speaker Change: That's helped and we believe the decline they saw in their revenue.
Speaker Change: We will still have some decline as people have already started looking but we will have less decline and over the next couple of quarters, we expect.
Speaker Change: Lifesize revenue to stabilize and probably profitability could still grow a little bit.
Especially as a percentage of that revenue.
Speaker Change: So.
You know, again, I think it was a good deal. It was an interesting deal in the sense that it wasn't a receivership, but as Vince had the stock performed very well, and we're ready to take on more.
Speaker Change: Again, I think it was a good deal it was an interesting deal in the sense that it wasn't a receivership, but as Vince said the staff performed very well.
Speaker Change: And we're ready to take on more.
sounds good. And then even one on the organic side, I think you mentioned in the Paramark broadening the global availability of SaaS solutions. Can you walk through this in a bit more detail? How is kind of your SaaS selling kind of changed?
Speaker Change: Sounds good and then one on the organic side I think you mentioned in the prepared remarks broadening the global availability of SaaS solutions can you walk through this in a bit more detail how's kind of your soft selling.
Speaker Change: Changing.
I'll give a short answer and let Vince take it. What we really do is offer choice. So we're not pushing staff. And some customers want on prem skill, but we offer choice. That's a little harder for us in that some of our sales guys have to know how to do that well. And that's taking a little bit of time. But we're hope that's gonna...
Speaker Change: I'll give a short answer and let Vince take it.
Vince: We really do is offer choice so we're not pushing SaaS.
Vince: Some customers want on Prem still but we offer choice that's a little harder for us in that some of our sales guys have to know how to do that well and that's taking a little bit of time, but we're hope that's going to.
be the right way forward to improve our internal growth a little bit. Maybe venture. Yeah, not much to add there other than the choice model also helps reduce churn because of a customer wants to go from, let's say, on prem to private cloud or multi-tenanted fast, we have that availability. So it was a lot of it was about getting our sales team ramped on doing that.
Vince: Be the right way forward to improve our internal growth a little bit maybe Vince you yeah, not much to add there other than the choice model also helps reduce churn because if a customer wants to go from let's say on prem to private cloud or multi tenanted SaaS, we have that availability. So it was a lot of it was.
Vince: Getting our sales team ramped on doing that.
Getting our operations team comfortable selling, you know, SaaS products and doing demand in around choice. So it helps reduce churn and it helps also win new business by having the flexibility of choice.
Vince: Getting our operations team comfortable selling.
Vince: SaaS products and doing demand Gen around choice. So it helps reduce churn and it helps also win new new business by having the flexibility of choice.
Speaker Change: Great. Thank you very much.
Thank you. And your next question comes from the line of Paul Kiber from RBC Capital Market Market here on the line. It's yourwho.
Speaker Change: Thank you and your next question comes from the line of Paul <unk> from RBC capital markets. Your line is open.
Oh, thanks very much and good morning. Just following up on the comments on SAS. Can you give us a sense of the magnitude of new SAS bookings or maybe just the rate of conversion within your install base from on-premise to SAS?
Paul: Oh, thanks, very much and good morning, just following up on the comments on SaaS can you give us.
Paul: Sure.
Paul: Our sense of the magnitude of new SaaS bookings or maybe just the rate of conversion within your install base from on premise to SaaS.
That's kind of hard to do. I will make a couple comments on staff. I think it helps customers.
Speaker Change: That's kind of hard to do I will make a couple of comments on SaaS I think it helps customers at.
It does not, it is not as profitable as on prem for suppliers.
Speaker Change: It does not it is not as profitable as on Prem for suppliers.
I'm saying that because part of our strategy, of course, the capital allocators to buy companies and we're finding the SaaS companies are the ones that are struggling the most.
Speaker Change: I'm, saying that because part of our strategy of course is the capital allocators to buy companies and we're finding the SaaS companies are the ones that are struggling the most and as you've seen we have bought a couple of in that area already so.
And if you've seen, we've had bought a couple of in that area already. So
You know, I think we let the customers choose. A lot of our customers were on prem. If you force them to fast, they will look and potentially leave, because no one likes to be forced to do anything, but I'll turn it to Vince to give for you. I think, you know, we don't go into a lot of detail in terms of, you know, new logo wins on SaaS and conversions, but we're getting success in both areas.
I think we let the customers choose a lot of our customers were on Prem If you force them to SaaS. They will look at potentially leave because no one likes to be forced to do anything but I'll turn it to.
Speaker Change: So Vince to give free I think we don't go into a lot of detail in terms of new logo wins on SaaS and conversions, but we're getting success in both areas winning new logos that are starting right away with either a private cloud or a multi tenant products and.
Winning new logos that are starting right away with either a private cloud or our multi-tenant products. And we're getting more conversions from on.
Speaker Change: And we're getting more conversions from on Prem.
Speaker Change: The SaaS and we're also getting partners that are standing up their own SaaS platforms based on <unk> technology and offering SaaS to their end customers. So we're seeing success.
And we're also getting partners that are standing up their own SaaS platforms based on NChelsea's technology and offering SaaS to their end customers. So we're seeing success in all the different areas.
Speaker Change: And all the different areas.
And Paul, that's important because most of the competitors in SaaS run it on their system. They don't allow partners to set up their own. We will let partners do that. So some of them are setting things up now and they will then sell on a SaaS basis our software to their customers.
Speaker Change: Paul that's important because most of the competitors in the SaaS run it on their system. They don't allow partners to set up the role we will let partners do that so some of them are setting things up now and they will then sell on a SaaS basis, our software to their customers and even some of them.
And even some of the telcos, sometimes they just buy licenses from us in maintenance and yet they use SAS to their customers. So we have a little bit of a more complex model, but it's really all about giving customers a choice.
Speaker Change: Telcos, sometimes they just buy licenses from us and maintenance and yet they use SaaS to their customers. So we have a little bit of a more complex model, but it's really all about giving customers choice.
Thanks, that's helpful. The comments that you made just in terms of product investments in AI and generative AI, we're interesting. Do you have a sense of the competitive ecosystem and how you're fairing competitively when customers look at your product roadmap and investments that you're making in AI? Because you called out new customer, new logo wins. Just if you have a sense of win rates and how you see that track.
Speaker Change: Thanks, that's helpful.
Speaker Change: The comments that you made just in terms of product investments in AI in general have AI or interesting.
Speaker Change: Do you have a sense of the competitive ecosystem and how you're faring competitively when customers look at your product roadmap investments that youre, making.
Speaker Change: In AI, because you called out.
Speaker Change: New customer new logo wins.
Speaker Change: Just if you have a sense of win rates and how you see that tracking.
You know, it's very interesting. Most of the things we hear is just people talking and not doing.
Speaker Change: It's very interesting.
Speaker Change: Most of the things we hear is just people talking and not doing we've taken the other approach and we decided to talk a little bit more today, because we usually do and don't say very much.
We've taken the other approach and we decided to talk a little bit more today because we usually do and don't say very much.
Again, it's helped us if you look at some of the competitors who talk about AI, they're not profitable and they aren't getting more profitable. So we don't know what AI they're doing. RAI is based on tangible things that help the company either increase revenue or reduce cost.
Speaker Change: Again, it's helped US if you look at some of the competitors who've talked about AI.
Speaker Change: They are not profitable and they are getting more profitable. So we don't know what AI they're doing.
Speaker Change: Our AI is based on tangible things that help the company either increase revenue or reduce costs. So again, it's a little bit different we don't see in the selling process. We have a big disadvantage there, but it is a change for us.
So again, it's a little bit different. We don't see in the selling process, we have a big disadvantage there, but it is a change for us. Again, and we're getting the salespeople up to speed to do a little better in that area, but all I've been, yeah, I think.
Speaker Change: Again, and we're getting the salespeople up to speed to do a little better in that area, but I'll, let Vince yes, I think in sales calls.
In sales calls, there's a lot of conversations about AI, because people want to know what we're doing in it, want to maybe incorporate it into their future plans. So there's a lot of conversations.
Speaker Change: There's a lot of conversations about AI as people want to know what we're doing and it wont it may be incorporated into their future plans. So there's a lot of conversations.
And like Steve said, we've got a very practical solution to AI and a lot of different things that they can use. But it's mostly in kind of conversation stage, I would say. So revenue's still early on it.
Speaker Change: And like Steve said, we've got a very practical solution to AI and a lot of different things that they can use.
Speaker Change: But it's mostly in kind of conversation stage I would say.
Speaker Change: So revenue still early on it but.
But like Steve said, we've been building these products for a while, so we have tangible things to show and we don't have any.
Speaker Change: But like Steve said, we've been building these products for a while so we have tangible things to show.
Speaker Change: We don't have any competitive disadvantage.
Thanks. Just a last question for me, just in regards to the M&A environment, can you comment on the environment, what you're seeing in terms of your pipeline? And then related to that, you've been fairly longish time for you at least, since the acquisition of lifestyle, at least was announced. What's sort of the disconnect perhaps between the environment and actually closing deals?
Speaker Change: Thanks.
Speaker Change: And just last question for me just in regards to the M&A environment can you comment on the environment, what youre seeing in terms of your pipeline.
Speaker Change: Then related to that.
Speaker Change: It's been fairly longish Tom for you at least since the acquisition of Lifesize at least was announced what's sort of the disconnect perhaps between the environment and.
Speaker Change: Actually closing deals that youre seeing.
It took a lot of work with the life size. I guess my simple answer to that is stay tuned.
Speaker Change: It took a lot of work with the life size I guess my simple answer to that is stay tuned.
We believe the acquisition environment is good for us. We're one of the few that have cast.
Speaker Change: We believe the acquisition environment is good for US. We're one of the few that have cash in our contact center. Most all of the competitors you can look up the public ones are way down in value. They don't make money and they don't have money and less investors give them more and they are reluctant to do so now.
In the context that are most all the competitors, you can look up the public ones are way down in value. They don't make money and they don't have money unless investors give them more and they're reluctant to do something.
So the markets changed and cash is king. And we're in a good spot. We have cash. We don't need anything from the market. And we've been watching the whole market space that we're in for a long time. So we're pretty confident on our acquisition strategy going forward. And we don't have any barriers to us doing our strategy.
Speaker Change: So the markets changed and cash is king and we're in a good spot we have cash we don't need anything from the market and we we've been watching the whole market space that were written for up for a long time. So we're pretty confident on our acquisition strategy going forward and we don't have any.
Speaker Change: Barriers to us doing our strategy.
And there's one, maybe just to add, you know, sorry, Paul just to add, you know, we did, we have beefed up our acquisition team as well. So we've done that about, you have about six.
Speaker Change: And just one quick maybe just to add.
Speaker Change: Great.
We did we have beefed up our acquisition team as well so we've done that a boat.
Speaker Change: Now, yes about six months ago. So that's.
you know, work in progress, which is increasing the activity level in M&A as well.
Speaker Change: Work in progress, which is increasing the activity level in M&A as well.
And a quick follow up, if you can give any hints, sort of say about the types of companies that you would consider here, like you look at larger ones, or you look at ones that are received for shift, like life size, fast versus on-premise. How should we think about that?
Speaker Change: And just a quick follow up.
Speaker Change: Give any hints sort of say about that.
Speaker Change: Types of companies.
Speaker Change: You would considering here like when you look at larger ones. When you look at ones that are receivership like lifesize SaaS versus on premise how should we think about that.
Like we've been doing for a long time, anything that gives us a five to six times, a six year return, at which Jeremy means an IRR over 20%.
Speaker Change: Like we've been doing for a long time.
Speaker Change: Anything that gives us a five to six times.
Speaker Change: Our six year return at which generally means an IRR over 20%.
We think there's lots of opportunities. We have a lot of cash, but we may-
Speaker Change: We think there's lots of opportunities we have a lot of cash.
Speaker Change: But we may need a lot of cash.
And we always look at companies typically ranging from five to 50 issues, been historical kind of size.
Speaker Change: And we always look at companies typically ranging from five to 50 ish has been historical kind of size.
We think so. That doesn't mean no, we can't do bigger. Yeah, just, you know, again, as you saw, let's look at the little bit as the marketplace, a little what we see, a buyer went into receivership, it's 2.5 billion, it was brought out, wrote off about two billion. And they're, let's say they're back in the,
Okay. Thanks, So does that mean, though we can't do bigger.
Speaker Change: Yes.
Speaker Change: Again as you saw.
Speaker Change: Looked at a little bit as the marketplace a little while.
Speaker Change: What we see Avaya went into receivership, it's $2 5 billion. It was brought out wrote off about $2 billion.
Speaker Change: And they're there.
Speaker Change: Let's say they are back in the market, but I think struggling a little bit.
I think struggling a little bit. A company called Verizon bought a competitor called Blue Jeans many years ago paid about 500 million for it.
A company called Verizon bought a competitor called Blue jeans, many years ago paid above 500 million forward.
They did about 100 million in revenue at the time. They've announced that they are going out of the business by the end of April , and you have to find other solutions. You have the life size, which we've talked about.
Speaker Change: They did about $100 million in revenue at the time, they've announced that they're going out of the business by the end of April and you have to find other solutions you have the lifesize, which we've talked about.
You can go look at the public companies, even the ones that have pretty good product. They are challenged to making money, somehow money because they raised it at the right time, when things were hot and others don't have much money. So they're in a bit of a timeline to do something. So we see the market.
Speaker Change: You can go look at the public companies, even the ones that are have pretty good product. They are challenged to making money somehow money because they raised it.
Speaker Change: At the right time, when things were hot and others don't have much money. So there they are on a bit of a timeline to do something so we see the market and if you look at the competitors.
And if you look at the competitors, in the, we didn't talk about it, but if you look at the AMG side, you can just look around Toronto at Ativia. They were, we used to be called Red Knee, they came out.
Speaker Change: In the in the we didn't talk about it but if you look at the.
Speaker Change: AMG side, you can just look around Toronto activity, they were used to be called red knee they came out.
You can see their stock, you can see their results, and you get some idea of what's happening in the marketplace. So it used to be, it didn't matter if you made money, and it didn't matter if you did revenue, but didn't make money. Life has changed. We're back to what I would call more normal, and you've got to have cash flow, and if you don't.
Speaker Change: You can see their stock you can see the results and you get enough you'll get some idea of what's happening in the marketplace.
Speaker Change: So it used to be it didn't matter. If you made money in it did matter. If you did revenue that didn't make money life has changed we're back to what I would call more normal and you've got a cash flow and if you don't.
At least many investors on the call can decide their own thing, but I don't see them putting a lot of money in these companies anymore.
Speaker Change: Many investors on the call can decide their own thing, but I don't see them, putting a lot of money in these companies anymore.
Even got zoomed, very good company. Went $500 down to what, 70 or 80 now? $5.00, good company with good product, went from over 200 to about 70. They're all, and if you look at the results, it's because they're not making money.
Speaker Change: Even got zoom very good company when $500 down to what 70 or 80 now.
Speaker Change: <unk> done a good company with good product went from over 200 do about 70.
And if you look at the results, it's because they're not making money.
Speaker Change: The growing okay.
But I guess their strategies grow to loss the keys for their shareholders is just a growth.
Speaker Change: But I guess they are their strategies drove the loss the keys for their shareholders is just to grow.
For our chair holders, we've always been looking more at the bottom line than the top line and we want profitable Revenue and that means we give up some revenue
Speaker Change: For our shareholders, we've always be looking more at the bottom line than the top line and we want profitable revenue and that means we give up some revenue.
I also point out in acquisitions, people wonder just add in the revenue.
Speaker Change: I'll also point out and acquisitions people wonder just add in the revenue.
Some of the way we get the profitability is take out revenue that's not profitable. And that could be we increase prices and say, look, here's what it's going to be. And if you, if you can't pay the price, you should find something else.
Speaker Change: Some of the way we get to profitability is take out revenue, that's not profitable and that could be we increased prices and say look here's what it's going to be in if you. If you kept payroll price you should find something else.
We aren't in for just revenue. We're in cash flow and a profit-oriented company. And yes, that hurts our sales growth a little bit, but...
Speaker Change: We arent in for just revenue were in cash flow and a profit oriented company.
Speaker Change: And yes that hurts, our our sales growth a little bit but.
Speaker Change: It seems to work okay in the environment today, it's nice to have the cash it's nice to have the growth and profitability and it's nice to have the money to do acquisitions.
Speaker Change: Thanks for those comments, so I'll pass the line.
Thank you and the ladies and gentlemen as your reminder should you have a question please press the star followed by the number one on your telephone keypad.
Speaker Change: Thank you and ladies and gentlemen, as a reminder, should you have a question. Please fastest star followed by the number one on your telephone keypad.
Speaker Change: Your next question comes from the line of Daniel Chiang from TD Cowen Your line is open.
All right, good morning. These are mentioned by the Lifetime Contribution, what declining more than you expect, but not more than you expect, but what's going to climb because of the receivers.
Daniel Chiang: Hi, good morning.
Daniel Chiang: Mentioned that the lifestyle contribution.
Daniel Chiang: Mining more than you would expect by Morningstar.
Daniel Chiang: The decline because of the receivership.
Just to help us calibrate how we're thinking about this, how much revenue did Lifeline contribute in the quarter? I can't even say what-
Daniel Chiang: Just to help us calibrate how are we thinking about this how much revenue did lifesize contributed in the quarter at what rate do you expect that.
Daniel Chiang: To continue declining.
Speaker Change: So two points.
It was declining, but not more than we thought it should be. Okay? So that's one because they had told their customers they had to go in the cloud and they had to have, you know, SaaS type model and many of their on-prem and said, okay, well, we'll go somewhere else.
Speaker Change: It was declining but not more than we thought it should be okay. The last one because they are told their customers. They had the goal of the cloud and they had to have a SaaS type model and many of their on Prem then said, okay, well will go somewhere else because some water on Prem and some said well I'm going to go to cloud our module look it up.
because some wandered on Pram and some said, well, I'm gonna go to cloud, I might as well look at other ones that are more mature than yours. So that's caused their problem. We're hoping that by letting them stay on Pram, that some of those customers that might have churned, looked, but a lot of started already. I do think.
Speaker Change: Other ones that are more mature than yours. So that's caused their problem, we're hoping that by letting them stay on prem that some of those customers that might have churned vault.
Speaker Change: But so what.
Speaker Change: <unk> have started already.
Speaker Change: I do think that the.
The results in the quarter, we don't give out exact numbers, but basically the revenue increase in the quarter.
Speaker Change: The results in the quarter, we don't give out exact numbers, but basically the revenue increase in the quarter.
from Q3 to Q4 is basically life size. So that gives you a sizing of the life size revenue. Without life size, we would have a slight decline, but much slower than in the past. And basically it's still because of video, and you can look at all the video companies, et cetera. They're all declining a little bit. Mostly because teams, Microsoft has really got into that space.
Speaker Change: From Q3 to Q4 is basically lifesize. So that gives you a sizing of the Lifesize revenue.
Speaker Change: Without lifesize, we would have a slight decline, but much slower than in the past and basically its still because of video and you can look at all the video companies et cetera, they're all declining a little bit mostly cuz teams, Microsoft has really got into that space.
So we still have slight decline in our, let's say our revenue without lifestyles and life size revenue.
Speaker Change: So we still had a slight decline in our let's.
Speaker Change: Lets say our revenue without Lifesize and Lifesize revenue was added to the quarterly revenue number and I will say that there's still maybe some where churn coming there, but theres also more opportunities in that customer base now that we've sort of changed the scenario.
was what added to the quarterly revenue number. And I will say,
that there's still maybe some more churn coming there, but there's also more opportunities in that customer base now that we've sort of changed the scenario. We think some of the customers may buy more, but maybe Viz you can add a bit. Yeah, Daniel, one other, a few other points. One is...
Speaker Change: We think some of the customers may buy more but maybe <unk> you can add a bit yes, Daniel one other a few other points one is that.
If by offering choice and you get a customer that says, we'll take your cloud product, your private cloud product versus on-prem, what happens is you get less perpetual revenue, but you get more recurring. So you see our recurring revenue is growing.
Daniel Chiang: By offering choice and you get a customer that says we will take your cloud product your private cloud product versus on Prem.
Daniel Chiang: <unk> as you get less perpetual revenue, but you get more recurring so you see our recurring revenue is growing.
because of that. So, and less on-prem. So, that's kind of one point. The other point is when we acquire a company like life size, we also have a whole bunch of technology within NChouse that we embed into their products.
Daniel Chiang: Because of that so and less on Prem. So that's kind of one point. The other point is when we acquire a company like life size. We also have a whole bunch of technology within Ngls that we embed into their products.
I mentioned this in the previous call called, we have a suite of products called inch house sores. And we also can bolster their products pretty quickly by just embedding our technology to improve theirs.
Daniel Chiang: Mentioned this in the previous call called that we have a suite of products called NGL source and we also can bolster their products pretty quick quickly digest.
Daniel Chiang: Embedding our technology to improve <unk>.
And we also get technology from this company that can improve our other products. So within life size, we got a workforce management piece of software that we never had in our portfolio. So we also get that to go and offer that to our customers.
Daniel Chiang: And we also get technology from that this company that can improve our other products. So within life size, we got a workforce management piece of software that we never had in our portfolio. So we also get that to go and offer that to our customers.
There's a lot of moving parts, but it does help in different ways as Vince has outlined. Sometimes we have to both, it takes time to both the products in the hours. One thing we don't do, we do not force customers to change.
Daniel Chiang: There's a lot of moving parts.
Daniel Chiang: But it does help in different ways as <unk> outlined.
Daniel Chiang: Sometimes we get the bulk of it takes time to both the products into ours.
Daniel Chiang: One thing we don't do we do not force customers to change.
And I'm talking about the EMG segment. That was the output of this in Concentrancy year year. Any color on what the drives of that was?
That's helpful. Thanks for that and maybe talk about the AG segment that was down quite a bit in constant currency year over year any color on what the drivers of that one.
Speaker Change: I missed the first part of that.
We didn't quite get in here either, sorry. Yeah, so rather being in G segment was down quite a bit in constant currency area, just any color on that and said, just do the completion.
Speaker Change: We Didnt question I didn't hear you there sorry, yes, so rather at the AMG segment was down quite a bit in constant currency year over year, just any color on that is it just the completion of some projects or was there anything to call out.
No, I think what you'll find in the AMG group, it's pretty steady. Everyone was hoping for 5G to improve things and keep them up, but the telcos have really cut back, worrying about a recession, and the 5G's not as strong as they thought. So we find that they're managing their costs a little bit and not doing a lot of new...
No.
Speaker Change: What you'll find in the AMG group, it's pretty steady.
Everyone was hoping for five G to improve things and keep them up but the telcos have really cut back worried about a recession and the five <unk> not as strong as they thought so we find that they're managing their cost a little bit and not doing a lot of new.
investing or purchasing at this time. It's still going pretty well for us compared to others, but yes, it slowed down in the, I think the fear of recession could be coming is also causing him to hold back a little bit, but we have noticed some pullback in the tentacles.
Speaker Change: Investing in our purchasing at this time, it's still going pretty well for us compared to others, but yes. It slowed down in the I think the fear of recession could be coming is also caused him to hold back a little bit, but we have noticed some pullback in the telcos.
And the art collections were really strong in the score. I think we didn't improve any color on what growth had.
Speaker Change: Okay. Thanks, and air collections were really strong this quarter, losing improve any color on what drove that improvement.
Hard work. Yeah, we're just, we're just on it, Daniel, we're staying on the receivable very closely because of the recession we don't want people stretching us so we're over indexing there I would say.
Speaker Change: Hard work.
Speaker Change: We're just we're just gonna Daniel where we're <unk>.
Speaker Change: On the receivables very closely because of the recession.
I don't want people stretching us so we're over indexing there I would say.
One last one for me. Thanks for all the color on the AI stuff fence. Gen AIs, due to potentially a place call center representative.
Speaker Change: Okay sounds good Okay. One last one from me thanks for all the color.
Speaker Change: Hey, guys. Thanks Vince.
Speaker Change: <unk> Youtube potentially please call center Representatives, what is <unk> doing to enable this and do you think this will change the business model is customer experience.
Speaker Change: Transforms.
Speaker Change: And the reason I'm not hearing AIDS.
Daniel, I'm sorry, it's hard to hear my apologies.
Speaker Change: I'm sorry, it's hard to hear my apologies.
Speaker Change: So I couldn't hear you.
But yeah, that's better now, I think. Yeah, just a question on Jenny. I, you know, it's due to potentially replaced call center representatives. Just wondering if you guys are doing anything there to help enable that and whether you think that transformation and the customer experience industry will change the business model for you.
Speaker Change: Yes, that's better now I think yes, just a question on journey II.
Speaker Change: It's due to potentially replace call Center Representatives. Just wondering if you guys are doing anything there to help enable that and whether you think that transformation and that's really experienced industry will change the business model for you guys.
I think we talked a little earlier. There's a lot of talk, but not much happening on that side, other than we are doing projects that are leading there, but they're projects.
Speaker Change: I think we've talked a little earlier, there was a lot of talk but.
Speaker Change: But not much happening on that side other than we are doing projects that are leading there, but there are projects.
You know, I've compared it before to five years ago when everyone said, I'm gonna sit in the back of a car and it's gonna drive me around. So we're gonna eliminate anyone driving cars. Haven't seen anyone doing that yet. And I don't think I'll see it in the future. We see the future really being in real life, practical manner is.
Speaker Change: I've compared to before two five years ago, when everyone said all going to sit in the back of a car that's going to drive me around so we're going to eliminate anyone driving cars haven't seen anyone doing that yet.
Speaker Change: Don't think youll see it in the future, we see the future really being in real life practical manner is.
is AI helping us do things, but not eliminating things. So it makes new agents up to speed faster. They can use it to do things. We do not see that elimination. I've joked before saying probably the analysts on the call will be eliminated before that ever happens in context center.
Speaker Change: Is AI is helping us do things, but not eliminating things. So it makes new agents up to speed faster. They can use it to do things, we do not see that elimination.
Speaker Change: I've joked before saying probably the analysts on the call will be eliminated before that ever happens in contact center.
Yeah, we don't, the conversations around using chat bots to answer simple questions, that's definitely occurring, which then frees up the agent to deal with more complicated interactions.
Speaker Change: Yes, we don't we the conversations around using chat bots to answers simple questions, that's definitely occurring which then frees up the agent.
Speaker Change: To deal with more complicated interactions.
There's not enough agents to handle all the activity out there in the world, but like Steve said, we see it as a productivity enhancement. That's what we see in the market. Looking for tools to make the agent better.
Speaker Change: Theres not enough agents to handle all of the activity out there in the world, but like Steve said, we see it as a productivity enhancement.
Speaker Change: That's what we see in the market looking for tools to make the agent better.
We don't believe in the right immediate or in the immediate future you're going to have no agents and the computer is going to answer the question because it usually you need an LLL of a large language model and especially our accounts are smaller so they don't have a big enough base of data to answer on the room but they can provide information and to somebody who can answer it. The cost of an agent doing that is not...
Speaker Change: We don't believe it.
Speaker Change: Right media or in the immediate future youre going to have no agents in the computer is going to answer the question because it usually you need an ela level large language model and especially our accounts are smaller so they don't have a big enough base of data to answer on the ROM, but they can provide information.
Speaker Change: And you just somebody who can answer it the cost of an agent doing that is not really high the agents aren't the highest paid people in the world. So again, we're trying to use it to get better answers it will get better over time, but right. Now you don't want to have computer give a wrong answer to somebody and cause a bigger problem too so.
Really high, the agents aren't the highest paid people in the world. Again, we're trying to use it to get better answers. It will get better over time, but right now you don't want to have computer give a wrong answer to somebody and cause a bigger problem too. We're in this space. We're doing practical solutions.
Speaker Change: So we are in this space, we're doing practical solutions.
But it's going to take a lot longer than the people who write about it are called visionaries, think it will. Just like I am still at home setting when dry, setting the back of a car or parcels being delivered by a car with no driver. It takes longer.
Speaker Change: But it's going to take a lot longer than the people who write about it.
Speaker Change: Calm visionaries.
Speaker Change: I think it will just like I hadn't spilled on setting one drive sitting in the back of a car or parcels being delivered by a car with no driver.
Speaker Change: It takes longer.
And we're there, we're in the space. We have someone who's total job was just to look at AI solutions for us.
Speaker Change: And we're there we're in this space, we have someone whose total job is just to look at AI.
Speaker Change: Solutions for us so we're doing that but it's not happening anywhere yet it's just a lot of nice discussion and again in some ways I'll say sarcastically I think is good for investment bankers to raise money for people.
So, you know, we're doing that, but it's not happening anywhere yet. It's just a lot of my discussion. And again, in some ways, I'll say it sarcastically, I think it's good for investment bankers to raise money for people on that vision.
Speaker Change: On that vision, but.
but in a company to make money doing it, other than the platform people, the video Google those guys, because they don't care if the company's using their services lose money, but all they have to have a large capacity to do AI. So they're all doing quite well.
Speaker Change: The company to make money doing it other than the platform people <unk>.
Speaker Change: Google those guys because they don't care if the company is using their services lose money.
Speaker Change: But all they have to have a large capacity to do AI, so they're all doing quite well.
I don't think our customers, even to just convert and have a large database, a large base of data.
Speaker Change: I don't think our customers, even though just to convert and have a large database a large base of data.
It's not that large. You've got to have a, you've got to be a bigger company. We sell generally to the middle size contact center.
Speaker Change: Not that large you've got to have you've got to be a bigger company, we sell generally to the middle sized contact centers.
So we do it as a hybrid model. Help them be more efficient. Help them answer their questions and help us answer their questions for them. But we don't have that same vision that shall we say that some of the other visionaries have.
Speaker Change: So we do it is a hybrid model help them be more efficient help them answer their questions and help us answer their questions for them.
Speaker Change: But we don't we don't have that same vision that shall.
Speaker Change: Shall we say that some of the other visionaries half.
Speaker Change: Thanks for the topline.
Thank you and there are no further questions at this time. I would like to turn it back to Mr. Stephen Sandler, Proclosure Network.
Speaker Change: Thank you and there are no further questions at this time I would like to turn it back to Mr. Stephen Sadler for closing remarks.
Okay, thank you everyone for attending the call and your continued support. Our objective remains to have a profitable growth both internally and by a creative capital allocation. And Charles is well positioned to execute its strategy in the current economic environment. Have a merry Christmas and a happy...
Stephen Sadler: Okay. Thank you everyone for attending the call and your continued support our objective remains to have a profitable.
Stephen Sadler: Profitable growth, both internally I am by accretive capital allocation and chose is well positioned to execute its strategy and the current economic environment.
Stephen Sadler: Have a merry Christmas and a happy holiday season.
Thank you for Seniors and Ladies and Gentlemen. This concludes today's conference call. Thank you for participating in me now. Disconnect.
Speaker Change: Thank you for centers and ladies and gentlemen. This concludes today's conference call. Thank you for participating you may now disconnect.
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