Q3 2024 E2open Parent Holdings Inc Earnings Call
Greetings.
Greetings.
Welcome to the E2 Open 3rd Quarter Fiscal Year 2024 Earnings Call. At this time, all participants
Welcome to the E. Two opened third quarter fiscal year of 'twenty 'twenty four earnings call.
At this time all participants are in a listen only mode.
Question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press zero on your telephone keypad. Please note this conference is
A question and answer session will follow the formal presentation, but anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad.
Please note this conference is being recorded.
I will now turn the conference over to your host, Dusty Biel, you may begin.
I will now turn the conference over to your host Dusty Bill you may begin.
Dusty Beal: Good afternoon everyone. At this time, I would like to welcome you all to the E2 Open fiscal third quarter 2024 earnings conference call. I am Dusty Biel, head of investor relations here at E2 Open.
Good afternoon, everyone. At this time I would like to welcome you all to the two open fiscal third quarter 2024 earnings Conference call I am Dusting Youll head of Investor Relations here at H, you're open to.
Speaker Change: Today's call will include recorded comments from our interim chief executive officer, Angela Pell, our chief commercial officer, Greg Randolph, and our chief financial officer, Marie Armstrong.
Today's call will include recorded comments from our interim Chief Executive Officer, Andrew upheld our Chief Commercial Officer, Greg Randolph and our Chief Financial Officer Marie Armstrong.
Speaker Change: Following those comments will open the call for a live Q&A session.
Following those comments, we'll open the call for a live Q&A session.
A replay of this call will be available on the company's Investor Relations website at investors Dot E. Two open dotcom information.
Speaker Change: A replay of this call will be available on the company's Investor Relations website at investors.eduopen.com. Information to access the replay is listed in today's press release, which is also available on our Investor Relations website. Before we begin, I'd like to remind everyone that during today's call, we will be making forward-looking statements regarding future events and financial performance, including guidance for our fiscal fourth quarter in full year 2024.
Information to access the replay is listed in today's press release, which is also available on our Investor Relations website.
Before we begin I'd like to remind everyone that during today's call, we'll be making forward looking statements regarding future events and financial performance, including guidance for our fiscal fourth quarter and full year 'twenty 'twenty four.
Speaker Change: These floor-looking statements are subject to known and unknown risk and uncertainties. E2 open cautions that these statements are not guaranteed to use a future performance. We encourage you to review our most recent reports, including our TINQ or any applicable amendments for a complete discussion of these factors and other risked MEA factor future results are the market price of our stock.
These forward looking statements are subject to known and unknown risks and uncertainties. Each open cautions that these statements are not guarantees of future performance. We encourage you to review our most recent reports, including our 10-Q or any applicable amendments for a complete discussion of these factors and other risks that may affect our future results or the market price of our stock.
Speaker Change: And finally, we are not obligating ourselves to revise our results for these forward-looking statements in light of new information or future events.
And finally, we're not obligating ourselves to revise our results or these forward looking statements in light of new information or future events.
Speaker Change: Also, during today's call, we'll refer to certain non- GAAP financial measures.
Also during today's call, we'll refer to certain non-GAAP financial measures.
Speaker Change: Reconciliation of non-GAP to GAAP measures and certain additional information are included in today's earnings press release, which can be viewed and downloaded from our investor relations website at investors.e2open.com. And with that, we'll begin by turning the call over to our interim CEO , Andrew Appel.
Reconciliations of non-GAAP to GAAP measures and certain additional information are included in today's earnings press release, which can be viewed and downloaded from our investor relations website at investors that eat two open dotcom.
And with that we'll begin by turning the call over to our interim CEO Andrew Paul.
Andrew Appel: Thank you, Gotti. And thanks to everyone for joining today's call. I'll begin with a high level review of what I've been focused on since joining you to open as the interim CEO three months ago.
Thank you Daphne and thanks to everyone for joining today's call I'll begin with a high level review of what I've been focused on since joining me to open as the interim CEO three months ago.
Andrew Appel: I'll provide my perspective on changes we need to make with the company back on a sustainable growth path. I'll then ask Greg to update you on the work he is leading to transform our commercial function and improve our sales execution.
I'll provide my perspective on the changes we need to make to put the company back on a sustainable growth path.
And as Greg to update you on the work easily and transform our commercial function and improve our sales execution.
Andrew Appel: Finally, Marie will review our third quarter financial results and guidance, and then we'll open up the call.
Finally, Murray will review, our third quarter financial results and guidance and then we'll open up the call for your questions.
Marie Armstrong: I'll start my comments with a simple but important note. I believe that E2Open possesses the key ingredients to be a successful, high-performing company that delivers unparalleled value for clients.
I'll start my comments with a simple but important note I believe that each who opened possesses the key ingredients to be a successful high performing company that delivers unparalleled value for clients.
Marie Armstrong: Generates healthy organic growth and generates attractive shareholder return.
Generate healthy organic growth and generate attractive shareholder returns.
Marie Armstrong: And I can remain an amazing and engaging place for our team members.
And I can remain an amazing and engaging place for our team members to work.
Marie Armstrong: Based on my experience in leaving the company for the last three months and being an advisor prior to that, I believe the ingredients that position each will open for success in the following.
Just on my experience in leading the company for the last three months of being an advisor prior to that I believe the ingredients that position <unk> for success are the following.
Marie Armstrong: First, we have a software portfolio that is unique in its Brad execution capabilities and ability to leverage connected networks and data.
First we have a software portfolio that is unique in its breadth execution capabilities and ability to leverage connected networks and data.
Marie Armstrong: This strong product offering has made us trusted partners to many of the world's leading companies.
This strong product offering has made us a trusted partners with many of the worlds leading companies.
Marie Armstrong: and enable our clients to make step change improvements in their increasingly complex supply
Enable our clients to make step change improvements in their increasingly complex supply chains.
Marie Armstrong: Our connected solutions are recognized by third-party analysts as industry-leading, and they provide a powerful, ready-built foundation for growing our business.
Our connected solutions are recognized by third party analysts as industry, leading and they provide a powerful ready build foundations for growing our business.
Marie Armstrong: Second, the addressable market for e2open's products is large and growing. As the global business environment grows ever more complex, major brand owners are embracing cloud-based SaaS-delivered software to make their supply chains more transparent, flexible, and secure.
Second the addressable market for each opens product is large and growing as the global business environment grows ever more complex major brand owners are embracing cloud based SaaS delivered software.
Make their supply chains more transparent flexible secure.
Marie Armstrong: For leading software vendors such as E2Open, this presents a major market opportunity.
We're leading software vendors such as <unk> presents a major market opportunity.
Marie Armstrong: And finally, I'm very impressed with the people of each world.
And finally, I'm very impressed with the people of each well, but they are the world's supply chain experts with a deep understanding of our clients' operating models.
Marie Armstrong: They are the world supply chain experts with a deep understanding of our appliance operating models.
Marie Armstrong: and a passion for collaborating to deliver reinvention and impact.
And a passion for collaborating to deliver reinvention and impacts.
Marie Armstrong: But while into open as the right ingredients to succeed our growth performance this year has been below that of our software peers and far short of our potential.
Oh Wow into open has the right ingredients to succeed our growth performance. This year has been below that of our software peers as far as sort of our potential.
Marie Armstrong: In my view, this stems largely from solvable gaps than how we serve our clients.
In my view this stems largely from solvable gaps and how we serve our clients.
Marie Armstrong: As we all know, building a skilled company through M&A requires much management time and attention.
As we all know building a scaled company through M&A requires much management time and attention.
Marie Armstrong: E2 Open spoke is an acquisition integration over the last several years to strike at us from the company's core mission of delighting clients and the impact
<unk> focus on acquisition integration over the last several years distracted us from the company's core mission of delighting clients.
And the impact on our growth was significant.
Marie Armstrong: So now our task is to re-accelerate growth by moving back to an approach that leverages our client-centric DNA.
Now our task is to Reaccelerate growth by moving back to an approach that leverages our client centric DNA.
From my perspective, the first priority is to lower our churn rate back to historical norms since the fourth quarter of FY2023 we have experienced higher churn that has negatively impacted our revenue as.
Marie Armstrong: From my perspective, the first priority is to lower our churn rate back to historical norm.
Marie Armstrong: Since the fourth quarter of FY 23, we've experienced higher term that has negatively impacted our revenue.
Marie Armstrong: As we have noted previously, the main drivers of this higher churn have been soft high-tech spending, M&A impacts, lower ocean freight volumes, and our long tail of smaller customers.
As we have noted previously the main drivers of this higher churn.
Stop high Tech spending M&A impact lower ocean freight volumes and our long tail of smaller customers.
Marie Armstrong: I am closely partnering with Greg to address all aspects of client engagement and satisfaction as part of a broader effort to ensure that we are delighting our customers.
Closely partnering with Greg to address all aspects of wide engagement satisfaction as part of a broader effort to ensure that we are delighting our customers.
Therefore, one of my key objectives is to drive a quote unquote no churn mindset across all our customer facing activities, including sales professional services and customer service.
Marie Armstrong: Therefore, one of my key objectives is to drive a quote-unquote no-churn mindset across all our customer-facing activities, including sales, professional services,
Marie Armstrong: and do whatever it takes at all levels to retain an existing reference.
And do whatever it takes at all levels to retain existing revenue.
Marie Armstrong: Over the past six weeks, I have conducted multiple in-depth half-day reviews of every situation where there is a risk of chair through the end of FY25.
Over the past six weeks I have conducted multiple in depth.
<unk> reviews of every situation, where there is a risk of share after the end of FY 'twenty five.
Marie Armstrong: Our visibility into this issue is now greatly improved and we have action plans in place.
Our visibility into this issue is now greatly improve and we have action plans in place.
Marie Armstrong: turn most of these clients into net promoters of E2 Open in short order.
Most of these clients at the net promoters of eats who opened in short order.
Marie Armstrong: In addition to control and turn, an equally important priority is to win more new business. To do this, we will start by communicating the client impact that our solutions are uniquely capable of delivering.
In addition to controlling chair and equally important priority is to win more new business to do this because of a start by communicating the client impact that our solutions are uniquely capable of delivering.
And then followed this up with strong sales execution.
Marie Armstrong: and then follow this up with strong sales execution.
Marie Armstrong: I am very confident that in Greg Randolph, we now have the right commercial leader to make this happen.
I am very confident that and Greg Randolph, we now have the right commercial leader to make this happen Greg.
Marie Armstrong: Greg is off to a fast start and has truly energized and refocused our stale's organization.
Greg is off to a fast start and is truly energized and refocused our sales organization.
Marie Armstrong: And while there's still work to do, I am pleased to say that Greg's first full quarter in the role.
And while there's still work to do I am pleased to say that Greg's first full quarter in the role.
Marie Armstrong: We saw encouraging signs of positive momentum and better sales execution.
We saw encouraging signs of positive momentum and better sales execution.
Marie Armstrong: After a soft second quarter, in Q3, our conversion rates improved and we closed the number of large and strategically important subscription softwares.
After a soft second quarter in Q3, our conversion rates improved and we closed a number of large and strategically important subscription software deals.
Marie Armstrong: But even beyond what Greg and his team are doing, our approach to driving sustainable higher growth must be a holistic company wide effort.
But even beyond what Greg and his team are doing our approach to driving sustainable higher growth must be a holistic companywide effort.
Marie Armstrong: that will ultimately impact many aspects of how we run our business.
That will ultimately impact many aspects of how we run our business.
Marie Armstrong: For example, whereas the supply chain industry is traditionally marketed solutions based on features and functionality, I believe E2 Open has much to gain by quantifying and clearly communicating the unique operational and financial impact that our solutions can drive compliance.
For example, whereas the supply chain industry has traditionally market solutions based on features and functionality.
I believe <unk> has much the game by quantifying and clearly communicating the unique operational and financial impact that our solutions can drive for clients.
Marie Armstrong: Adopting this approach can differentiate us within the industry and improve our competitive.
Adopting this approach can differentiate us within the industry and improve our competitive position.
Marie Armstrong: Even more broadly, we must reorient our core revenue-related activities including product development, sales engagement, solution implementation, and customer service.
Even more broadly you must reorient, our core revenue related activities, including product development sales engagement solution implementation and customer service.
Marie Armstrong: to focus on the singular goal of delighting our clients.
To focus on the singular goal of delighting our clients as we invest further in our products. We must ensure this development work aligned tightly with client needs and expectations and.
Marie Armstrong: As we invest further in our products, we must ensure this development work aligns tightly with client needs and expectations.
Marie Armstrong: And we must pursue law and delivery of every solution implementation and service projects so that we always need or exceed our commitments to customer
And we must pursue flawless delivery of every solution implementation. It service projects, so that we always meet or exceed our commitments to customers.
Marie Armstrong: We have worked to do in all these areas, but I am confident that a renewed commitment to client satisfaction in all areas of our business and set up a virtuous circle of growth benefits.
We have work to do in all of these areas, but I am confident that our renewed commitment to client satisfaction at all areas of our business and set up a virtuous circle of growth benefits.
Marie Armstrong: It can help reduce turn and it can facilitate our better execution of our land and expand strategy to drive new cross sell and upsell business with our world class client.
It can help reduce churn and it can facilitate our better execution of our land and expand strategy to drive new cross sell and upsell business with a world class client base.
Marie Armstrong: And it can generate more referenceable clients, both companies and individuals that will serve as powerful advocates for e2 open as we seek to add new logos or expand into white space and existing customers.
And it can generate more reference of all clients both companies and individuals that will serve as powerful advocates for each open as we seek to win new logos or expand into white space at existing customers.
And so my first three months of <unk> have been busy and lightning and protected.
Marie Armstrong: And some, my first three months at E2 Open have been busy in lightning and production.
Marie Armstrong: The observations I've shared with you today are a snapshot of where we stand and where we need to go.
The observations I've shared with you today are a snapshot of where we stand and where we need to go.
But I believe that we are just getting started with leveraging improvement opportunities.
Marie Armstrong: But I believe that we are just getting started with leveraging improvement opportunities.
Marie Armstrong: And as we further refine our growth strategy and execute on key steps to look to implement new operating efficiencies wherever possible our goal.
And as we further refine our growth strategy and execute our key staff. So look to implement new operating efficiencies wherever possible. Our goal has not changed we aim to achieve both strong growth as well as high profitability and cash flow.
Marie Armstrong: We aim to achieve both strong growth as well as high profitability and cash.
Marie Armstrong: In the meantime, I'm very proud of the way our teams are pulling together and collaborating towards a common goal and I'm encouraged by the early signs of positive momentum and business performance that we are seeing.
In the meantime, I'm very proud of the way our teams are pulling together and collaborating towards a common goal and I am encouraged by the early signs of positive momentum in business performance that we are seeing most of all I am very excited about the clear opportunity we have in front of us to create value for our clients and our shareholders.
Marie Armstrong: Most of all, I am very excited about the clear opportunity we have in front of us to create value for our clients and our shareholders.
At this time I'd like to turn it over to Greg for an update on our go to market activities.
Marie Armstrong: At this time, I'd like to turn it over to Greg for an update on our go to market activity.
Greg Randolph: Thank you, Andrew, and good afternoon, everyone. On our Q2 earnings call, I outlined the issues I believe we're holding back our growth, including sales coverage challenges, as well as inconsistent customer engagement.
Thank you Andrew and good afternoon, everyone on our Q2 earnings call I outlined the issues I believes we're holding back our growth, including sales coverage challenges as well as inconsistent customer engagement.
Greg Randolph: I also previewed the key steps we are taking to improve sales execution.
I also previewed the key steps, we are taking to improve sales execution, such as reorganizing our sales and professional services functions, bringing.
Greg Randolph: such as reorganizing our sales and professional services functions, bringing in new leadership and implementing a discipline repeatable approach to the fundamental principles of effective selling.
Bringing in new leadership and implementing a disciplined repeatable approach to the fundamental principles of effective selling.
Greg Randolph: Today, I'm pleased to report that this multi-quarter process is on track and in some areas ahead of plan.
Today.
I'm pleased to report that this multi quarter process is on track and in some areas are ahead of plan.
Greg Randolph: And as in all successful change processes, we are working hard to knock some early wins to build confidence and create momentum.
And as in all successful change processes, we are working hard to knock some early wins to build confidence and create momentum.
Greg Randolph: Today, I will provide you with an update on our sales transformation efforts and also highlight some Q3 subscription wins that exemplify the growth acceleration that we aim to achieve.
Today I will provide you with an update on our sales transformation efforts and also highlights from Q3 subscription wins that exemplify the growth acceleration that we aim to achieve.
Greg Randolph: A prerequisite for change is having the right leadership in place. And during the third quarter, I brought new sales leadership into the organization in two areas that are critical for our success.
A prerequisite for change is having the right leadership in place and during the third quarter I brought in new sales leadership into the organization in two areas that are critical for our success.
First Lisa Gorilla joined my sales leadership team as our new senior Vice President of sales operations.
Greg Randolph: First, Lisa Agrella joined my sales leadership team as our new Senior Vice President of Sales Operations.
Greg Randolph: Lisa and I have worked together at a previous growth oriented software company and she is an ideal fit to lead all aspects of sales operations and enablement.
Lisa and I have worked together at a previous growth oriented software company and she is an ideal fit to lead all aspects of sales operations at enablement Eddie to open.
Greg Randolph: Lisa will drive a broad range of initiatives, including sales process transformation, enhanced sales training, more disciplined pipeline and churn management, implementation, quality, and improved forecast.
Alicia will drive a broad range of initiatives, including sales process transformation enhanced sales training more disciplined pipeline and churn management implementation quality and improved forecasting.
Greg Randolph: becoming much better in these areas will provide the foundation for many other actions we are taking to achieve sales excellence.
Becoming much better in these areas will provide the foundation for many other actions we are taking to achieve sales actions.
Greg Randolph: Lisa's team is off to a great start and already in December , they rolled out a comprehensive set of new sales training playbooks specific to each of e2opens five product family.
Lisa's team is off to a great start and already in December they rolled out a comprehensive set of new sales training playbooks specific to each of the two opens five product families.
Greg Randolph: This enhanced training effort will ensure that our sales teams are deeply knowledgeable about our product offerings and can effectively communicate their compelling value proposition to our clients.
This enhanced training effort will ensure that our sales teams are deeply knowledgeable about our product offerings and can effectively communicate the compelling value proposition to our clients.
Greg Randolph: Ultimately the change process that Lisa is leading will give our sales organization all the tools it needs to effectively execute across an upsell focused growth model.
Ultimately the change process that Lisa is leading will give our sales organization all the tools it needs to effectively execute our cross and upsell focused growth model.
And second <unk>.
Greg Randolph: And second, Matt Hurley is joining my self-leadership team as our new Senior Vice President of Channel and Growth Initiative.
Matt Hurley has joined my sales leadership team as our new senior Vice President of channel and growth initiatives in.
Greg Randolph: In this critical role, that will have responsibility for expanding and optimizing our channel partner relationships, including our highly strategic system integrator net.
In this critical role, Matt will have responsibility for expanding and optimizing our channel partner relationships, including our highly strategic system integrator network.
Matt Hurley: Indirect sales channels and partner alliances represent a major growth area for E2 Open.
Indirect sales channels and partner alliances represent a major growth area for each open.
Matt Hurley: We've already made significant investments to create a robust SI ecosystem and Matt will build on the strong foundation by executing a comprehensive channel and partner strategy that leverages the size and other key distribution relations.
We have already made significant investments to create a robust si ecosystem and Matt will build on this strong foundation by executing a comprehensive channel and partner strategy that leverages the size and other key distribution relationships.
Matt Hurley: The goal of this strategy is to materially expand E2 opens market reach and give us access to promising new growth opportunities, specifically.
The goal of this strategy is to materially expand E. Two opens market reach and give us access to promising new growth opportunities.
Specifically on the ESI front.
Matt Hurley: Matt and his team are now putting in place a detailed growth plan that directly matches each SI's poor competency and implementation experience with specific demand generation targets for each E2 open product.
Matt and his team are now putting in place a detailed growth plan that directly matches, each <unk> core competency and implementation experience with specific demand generation targets for each E. Two open products.
Matt Hurley: In addition to these leadership additions, I am personally leading a comprehensive effort to make customer engagement and satisfaction a top priority across our sales organization. I've now visited most of E2 Open's major customers in North America and Europe , and hearing firsthand how strategic our solutions are to their operations was truly confidence inspiring for me.
In addition to these leadership additions I am personally leading a comprehensive effort to make customer engagement and satisfaction a top priority across our sales organization I have now visited most of <unk> major customers in North America, and Europe, and hearing firsthand, how strategic our solutions are to their operations.
Truly confidence inspiring for me.
Matt Hurley: Going forward, this type of proactive routine customer touch point will be at the core of E2 Open standard relationship and sales motion.
Going forward this type of proactive routine customer touch points will be at the core of each you open standard relationship and sales motion.
Matt Hurley: Achieving deep engagement with customers is key to selling mission critical enterprise software. And it will ensure that our customers receive maximum value from our solutions, but their implementations are flawless.
Achieving deep engagement with customers is key to selling mission critical enterprise software and it will ensure that our customers receive maximum value from our solutions, but their implementations are flawless.
Matt Hurley: and that they share our vision for further developing our software platform.
And that they share our vision for further developing our software platform.
Matt Hurley: In addition, improved customer engagement will serve as an early warning system for potential charm risks so that we can take remedial actions much earlier in the process.
In addition improved customer engagement will serve as an early warning system for potential churn risks. So that we can take remedial actions much earlier in the process.
Matt Hurley: As Andrew noted, we are actively addressing known churn risks on a priority basis, and we are confident this is a very manageable issue.
As Andrew noted we are actively addressing known churn risks on a priority basis and we are confident this is a very manageable issue. However, customer churn decisions are often made a year or more in advance and therefore, we continue to expect fourth quarter churn to remain elevated.
Matt Hurley: However, customer churn decisions are often made a year or more in advance, and therefore we continue to expect fourth quarter churn to remain elevated. Overall,
Overall my philosophy.
Matt Hurley: and the way I will manage the commercial organization is that E2Open must apply the same degree of management focus and organizational discipline to delighting customers and minimizing churn that we apply to winning new business.
And the way I will manage the commercial organization is it E. Two open must apply the same degree of management focus and organizational discipline to delighting customers and minimizing churn that we apply to winning new business.
To summarize we have multiple commercial initiatives in flight and we are making good progress while we still have work to do I was encouraged by the stronger finish and improved win rate than our sales organization achieved in the third quarter.
Matt Hurley: To summarize, we have multiple commercial initiatives in flight and we are making good progress. While we still have work to do, I was encouraged by the stronger finish and improved wind rate that our sales organization achieved in the third quarter.
Matt Hurley: This improved execution, which spans cross-cell, up-cell, new logo wins, and new attached and unattached professional services engagements, clearly demonstrates E2-opens potential for growth as we fully implement the cell's execution changes I've described.
This improved execution, which spans cross sell upsell, new logo wins and new attachment unattached professional services engagements clearly demonstrates E. Two opens potential for growth as we fully implement the sales execution changes I've described.
Matt Hurley: For example, on the cross cell and upsell side, we book significant expansion wins with household main customers in a wide range of industries including software, home and commercial hardware, industrial electronics, and heavy equipment manufacturing.
For example on the cross sell and up sell side, we booked significant expansion wins with household name customers and a wide range of industries, including software home and commercial hardware industrial electronics and heavy equipment manufacturing and on the new logo side, we added well known global suppliers of.
Matt Hurley: And on the new logo side, we added well known global suppliers of transportation and agricultural equipment to our already impressive list of major manufacturing clients.
Rotation and agricultural equipment to our already impressive list of major manufacturing clients.
Matt Hurley: And in the clear demonstration of the value of our comprehensive software, we won new business during Q3 by saying a range of solutions, including transportation and global trade management, multi tier supplier collaboration, global logistics orchestration and channel optimization.
And in a clear demonstration of the value of our comprehensive software we won new business during Q3 by saying a range of solutions, including transportation of global trade management, multi tier supplier collaboration global logistics orchestration and channel optimization.
As I noted we are just getting started with building a world class sales function.
Matt Hurley: As I noted, we are just getting started with building the world class sales function.
Matt Hurley: What we must now do is sustain the win rate momentum we saw in Q3 while also rapidly growing our pipeline of high value sales opportunities that match well with E2 opens competitive strengths and overall growth strategy.
What we must now do with sustained the win rate momentum. We saw in Q3, while also rapidly growing our pipeline of high value sales opportunities that match well with E. Two opens competitive strength and overall growth strategy.
Matt Hurley: putting these two components together will be a powerful combination.
Adding these two components together will be a powerful combination I've.
Speaker Change: I've seen this playbook succeed many times in my career and I'm confident it will do so at E2 Open.
I've seen this playbook succeed many times in my career and I'm confident it will do so at <unk> two open.
Speaker Change: At this time, I'd like to turn the call over to Marie for a discussion of our third quarter results and updated guidance.
At this time I'd like to turn the call over to Murray for a discussion of our third quarter results and updated guidance.
Marie Armstrong: Thank you, Greg. I echo what Andrew said. You truly are off to a fast start. It is remarkable how much process and focus shift you and Andrew have brought to ETU open in a short period of time.
Thank you Greg.
Oh, what Andrew said, you truly are off to a fast start it is remarkable how much process and talk a shift you and Andrew has brought to <unk> to open in a short period of time.
Marie Armstrong: I'm looking forward to seeing how much we can accomplish together to grow our business and I believe the good execution results we saw this quarter are just the start.
Im looking forward to seeing how much we can accomplish together to grow our business and I believe the good execution results. We saw this quarter are just the start.
Marie Armstrong: I will begin with an overview of our third quarter result.
I will begin with an overview of our third quarter results.
Marie Armstrong: Our subscription revenue was 132.8 million representing 84% of our total revenue.
Our subscription revenue was $132 8 million, representing 84% of our total revenue.
Marie Armstrong: While this is near the high end of our quarterly guidance, the negative 1.5% year-over-year growth rate and subscription revenue was well below our potential.
This is near the high end of our quarterly guidance the negative one 5% year over year growth rate in subscription revenue was well below our potential.
Marie Armstrong: However, after relatively soft Q2 bookings performance, Q3 clearly showed encouraging signs of improving business execution, including the closure of several subscription deals of a million dollars or more in annual revenue, representing both upsell and new logo business.
However, after a relatively soft Q2 bookings performance Q3, clearly showed encouraging signs of improving business execution, including the closure of several subscription deals of $1 million or more in annual revenue, representing both upsell and new logo business.
Marie Armstrong: We still expect the challenges we have experienced since late FY 2023, including customer budget pressures and longer sales cycles to impact our growth through the end of the fiscal year. However, the better sales execution in Q3, along with all the work we're doing to mitigate churn, gives us confidence that our strong focus on go-to-market execution and client experience is laying the foundation for higher growth. Thank you very much.
We still expect the challenges we have experienced since late FY 2023, including customer budget pressures and longer sales cycles to impact our growth through the end of this fiscal year.
However, the better sales execution in Q3, along with all the work we're doing to mitigate churn gives us confidence that our strong focus on go to market execution and client experience is laying the foundation for higher growth.
Marie Armstrong: Professional services and other revenue in the fiscal third quarter was 24.7 million reflecting an organic growth rate of negative 17.7% which is far short of our potential and reflects continued volatility in customer spending on services project.
Professional services and other revenue in the fiscal third quarter was $24 7 million, reflecting an organic growth rate of negative 17, 7%, which is far short of our potential and reflects continued volatility and customer spending on services projects.
Marie Armstrong: We did, however, exit the third quarter with improved new services bookings, particularly compared to a soft Q2.
We did however exit the third quarter with improved new services bookings, particularly compared to a soft Q2.
Marie Armstrong: This is partly driven by new attached services business that accompany the large subscription deals we close during the quarter.
This was partly driven by new attached services business that accompanied the large subscription deals we closed during the quarter.
Marie Armstrong: We also had better unattached bookings supported by organizational changes we made in our PS business early in Q3.
We also had better unattached bookings supported by organizational changes we've made in our Rps business early in Q3.
Marie Armstrong: So overall, we saw better execution this quarter, PRPS business.
So overall, we saw better execution this quarter Pi Rps business as.
Marie Armstrong: As we finish the year, I would note that due for services revenue tends to be seasonally weaker for us in part due to the impact of holidays on our workable service hours.
As we finished the year I would note that Q4 services revenue tends to be seasonally weaker for us in part due to the impact of holidays on our workable service hours.
Marie Armstrong: Total revenue for fiscal third quarter was 157.5 million. This reflects organic growth of negative 4.5% over the prior year quarter.
Total revenue for fiscal third quarter was $157 5 million. This reflects organic growth of negative four 5% over the prior year quarter.
non-GAAP gross profit for the fiscal third quarter was $109 7 million, reflecting a three 4% decrease on an organic basis non.
Marie Armstrong: Non-gab gross profit for the fiscal third quarter was $109.7 million, reflecting a 3.4% decrease on an organic basis.
Marie Armstrong: non-gap gross margin was 69.6% in the third quarter compared to 68.9% in the prior year quarter.
non-GAAP gross margin was 69, 6% in the third quarter compared to 68, 9% in the prior year quarter.
Marie Armstrong: Our Q3 gross margin performance benefited in part from cost deficiencies in our services business that we actioned this fiscal year.
Q3 gross margin performance benefited in part from cost efficiencies in our services business that a reaction this fiscal year.
Turning to EBITDA, our third quarter, adjusted EBITDA was $55 4 million compared to $56 2 million in the prior year quarter, a decrease of one 4% that was mainly driven by lower revenues.
Marie Armstrong: Turning to EBITDA, our third quarter adjusted EBITDA was 55.4 million compared to 56.2 million in the prior year quarter, a decrease of 1.4% that was mainly driven by lower revenue.
Marie Armstrong: Third quarter adjusted EBITDA margin was 35.1% compared to EBITDA margin of 34.1% for the prior year quarter.
Third quarter adjusted EBITDA margin was 35, 1% compared to EBITDA margin of 34, 1% for the prior year quarter.
Marie Armstrong: The incremental improvement in adjusted EBITDA margin reflects continued cost discipline during the quarter related to headcount and other operating spend items.
The incremental improvement in adjusted EBITDA margin reflects continued cost discipline during the quarter related to head count and other operating spend items.
Marie Armstrong: As always, we're maintaining our focus on operational efficiency in order to ensure strong and sustainable profitability.
As always we're maintaining our focus on operational efficiency in order to ensure strong and sustainable profitability.
Marie Armstrong: However, accelerating growth remains our number one goal, and we will continue to invest as needed to drive revenue.
However, accelerating growth remains our number one goal and we will continue to invest as needed to drive revenue.
Marie Armstrong: finishing off one profitability net loss for the fiscal third quarter of 2024 was 740 million.
Finishing up on profitability net loss for the fiscal third quarter of 2024 was $740 million.
Marie Armstrong: This net loss includes non-cash impairment charges of $717.7 million during the quarter.
This net loss includes noncash impairment charges of $717 7 million during the quarter.
Marie Armstrong: Similar to impairments recorded in Q4 FY23 and Q1 FY24, the triggering event for the Q3 impairments was the decline in our share price that followed our Q2 FY24 earnings release.
Similar to impairments, we recorded in Q4, FY 'twenty, three and Q1 FY 'twenty for the triggering event for the Q3 impairments was the decline in our share price that followed our Q2 FY 'twenty four earnings release.
Marie Armstrong: The Q3 net loss was also impacted by higher one-time expenses, including $4.3 million of severance related to CO and COO transition, as well as other headcount actions.
The Q3 net loss was also impacted by higher one time expenses, including $4 3 million of severance related to CEO and CFO transition as well as other head count actions. We also incurred higher nonrecurring professional fees during the quarter mainly related to executive transitions.
Marie Armstrong: We also incurred higher non-recurring professional fees during the quarter, mainly related to executive transitions.
Now turning to cash flow.
Marie Armstrong: During the fiscal third quarter, we generated 5.4 million of operating cash flow. This figure was significantly impacted by non-recurring cash expenses paid during Q3.
During the fiscal third quarter, we generated $5 4 million of operating cash flow.
This figure was significantly impacted by nonrecurring cash expenses paid during Q3.
Marie Armstrong: These included the $17.8 million litigation settlement related to the 2014 Blue Jay predecessor contract that we previously discussed on our Q2 earnings call, as well as the severance and higher professional fees that I just noted.
These included the $17 8 million litigation settlement related to 2014 Bluejay predecessor contract that we've previously discussed on our Q2 earnings call as well as the severance and higher professional fees that I just noted.
Marie Armstrong: excluding these one-time costs during the third quarter we generate 34 million of adjusted operating cash flow and our year-to-date cash flow exclusive of non-retiring expenses with 79 million.
Excluding these one time costs during the third quarter, we generated $34 million of adjusted operating cash flow and our year to date cash flow exclusive of nonrecurring expenses was $79 million.
Marie Armstrong: As these results demonstrate, our underlying business continues to be a very healthy cash generator.
As these results demonstrate our underlying business continues to be a very healthy cash generator.
Marie Armstrong: Driving cash flow remains a core objective for our management team as it provides us with financial flexibility and enables us to continue to fund future organic growth.
Driving cash flow remains a core objective for our management team as it provides us with financial flexibility and enables us to continue to fund future organic growth.
Marie Armstrong: This completes my remarks on our fiscal Q3 2024 results.
This completes my remarks on our fiscal Q3 2024 results.
Marie Armstrong: At this point, I'll turn to a discussion of financial guidance.
At this point I'll turn to a discussion of financial guidance.
Marie Armstrong: For the fiscal fourth quarter, we expect subscription revenue to be in the range of $131 to $134 million.
For the fiscal fourth quarter, we expect subscription revenue to be in the range of 131 $234 million.
Marie Armstrong: This range represents the growth rate of negative 4.3% to negative 2.1%, as compared to the prior year fiscal fourth quarter.
This range represents a growth rate of negative four 3% to negative two 1% as compared to the prior year fiscal fourth quarter.
Marie Armstrong: For the full fiscal year 2024, our guidance remains in line with what we communicated during our second fiscal quarter earnings call, except that we are now able to narrow the range given our Q3 results and our Q4 outlook. We're updating our.
For the full fiscal year 2024 hour guidance remains in line with what we communicated during our second fiscal quarter earnings call, except that we are now able to narrow the range given our Q3 results and our Q4 outlook.
We're updating our full year guidance as follows we.
Marie Armstrong: We expect subscription revenue in the range of $533 to $536 million for FY24 versus our prior guidance of $530 to $538 million.
We expect subscription revenue in the range of $533 million to $536 million for FY 'twenty four versus our prior guidance of $530 million to $538 million.
Marie Armstrong: We expect FY 24 total revenue to be within the range of 628 to 633 million versus our prior guidance of 625 to 635 million.
We expect FY 'twenty for total revenue to be within the range of $628 million to $633 million versus our prior guidance of $625 million to $635 million.
Marie Armstrong: We continue to expect FY24 gross profit margin to be within the range of 68 to 70%.
We continue to expect FY 'twenty for gross profit margin to be within the range of 68% to 70%.
Marie Armstrong: Finally, we continue to expect FY24 adjusted EBITDA to be within the range of $215 to $220 million.
Finally, we continue to expect FY 'twenty for adjusted EBITDA to be within the range of $215 million to $220 million.
This range implies an adjusted EBITDA margin of 34% to 35% for FY 'twenty four.
Marie Armstrong: This range implies an adjusted EBITDA margin of 34 to 35% for FY 24.
Marie Armstrong: emphasizing the strong importance we place in cash flow generation as a key performance indicator, I would also like to provide an update on our cash-related expectations for the year. In terms of key drivers for FYI,
Emphasizing the strong importance, we place on cash flow generation as a key performance indicator.
I'd also like to provide an update on our cash related expectations for the year.
In terms of key drivers for FY 'twenty for cash flow.
Marie Armstrong: Our expectations around full year CAPEX continued to be approximately 5% of revenue in FY24 versus 7% of revenue in FY23, which included M&A related CAPEX.
Our expectations around full year Capex continued to be approximately 5% of revenue in FY 'twenty four versus 7% of revenue in FY 'twenty, three which included M&A related capex.
Marie Armstrong: We still plan to drive year-over-year improvements in working capital and expect FY24 working capital to be a modest use of cash.
We still plan to drive year over year improvements in working capital and expect FY 'twenty for working capital to be a modest use of cash.
Marie Armstrong: We expect net cash interest to be within a tighter range of 97 to 99 million versus our prior expectation of 95 to 99 million.
We expect net cash interest to be within a tighter range of $97 million to $99 million versus our prior expectation of $95 million to $99 million.
Marie Armstrong: As a reminder, net cash interest includes the benefit of interest income on excess cash and also cash receipts on the interest rate collars we executed during Q2, which are currently in the money.
As a reminder, net cash interest includes the benefit of interest income on excess cash and also cash receipts on the interest rate collars, we executed during Q2, which are currently in the money.
Marie Armstrong: Finally, our expectations for full-year one-time cash cost have increased to approximately 35 million.
Finally, our expectations for full year, one time cash costs have increased to approximately $35 million.
Marie Armstrong: Contributing factors as noted previously include a 17.8 million arbitration settlement which we paid in fiscal Q3 FY 24 as well as severance and professional.
Contributing factors as noted previously include a $17 8 million arbitration settlement, which we paid in fiscal Q3, FY 'twenty four as well as severance and professional fees.
Considering the above cash related factors as well as our current expectations around FY 'twenty for adjusted EBITDA, We remain on track to generate a healthy increase in balance sheet cash by the end of this fiscal year, both compared to fiscal Q3.
Marie Armstrong: Considering the above cache related factors, as well as our current expectations around FY24 adjusted EBITDA, we remain on track to generate a healthy increase in balance sheet cache by the end of the fiscal year, both comparative fiscal Q3 and versus the end of F.
And versus the end of FY2023.
Marie Armstrong: We continue to expect net leverage of approximately 4.3 times or below at the end of this fiscal year.
We continue to expect net leverage of approximately four three times or below at the end of this fiscal year.
As Andrew emphasized E. Two open possesses unique assets and capabilities and our addressable market is large and expanding.
Marie Armstrong: As Andrew emphasized, E2Open possesses unique assets and capabilities.
Marie Armstrong: and our addressable market is large and expanding.
Marie Armstrong: We have tremendous potential to drive organic growth, and we're very encouraged by signs of improved business performance as we exited our fiscal third quarter.
We have tremendous potential to drive organic growth and we're very encouraged by signs of improved business performance as we exited our fiscal third quarter.
Marie Armstrong: In particular, the closure of more large description deals and improved services execution.
In particular, the closure of more large subscription deals and improved service execution.
Marie Armstrong: While we still have work to do, we look forward to building on this momentum in the last quarter of the year and for an improved positioning into our next phase.
While we still have work to do we look forward to building on this momentum in the last quarter of the year.
And for an improved positioning into our next fiscal year.
Speaker Change: Before I open up the call for Q&A, I want to briefly acknowledge the Schedule 13-D filed on behalf of Elliott Management on October 13th of last year.
Before I open up the call for Q&A I want to briefly acknowledge the schedule 13D filed on behalf of Elliott management on October 13th of last year.
Speaker Change: E2Open routinely engages in ongoing and collaborative dialogue with shareholders.
Each open routinely engages and ongoing and collaborative dialogue with shareholders.
Speaker Change: and our board and management team are committed to evaluating all potential pathways to maximizing shareholder value. Beyond this acknowledgement, we do not plan to make additional comments on this issue at the present time.
And our board and management team are committed to evaluating all potential pathways to maximizing shareholder value.
And this acknowledgment, we do not plan to make additional comments on this issue at the present time.
That concludes our prepared remarks, and thank you all for joining US today operator, please open up the line and begin the Q&A session.
Speaker Change: That concludes our prepared remarks, and thank you all for joining us today. Operator, please open up the line and begin the Q&A session.
Thank you at this time, we will be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad.
Speaker Change: Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your hand set before pressing the star keys. One moment please, while we pull for questions.
Confirmation tone will indicate your line is in the question queue. You May press star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys, one moment, please while we poll for questions.
The first question comes from Adam Hotchkiss with Goldman Sachs. Please proceed.
Speaker Change: I guess the start would be curious after your deeper review of customers, which specific areas of the business you're seeing the highest levels of churn, whether that's particular client sizes or products, or if it's more broad based on that, and then just any specifics on how you're crafting action plan to address those specific hotspots, just any more color on that would be helpful.
I guess to start I'd be curious after your deeper review of customers, which specific areas of the business you are seeing the highest levels of churn, whether thats particular client sizes or products or if it's more broad based on that and then just any specifics on how you are crafting action plans to address those specific.
Hotspots.
Any more color on that would be helpful.
Hi, This is Marie happy new year and great to hear from you.
Speaker Change: Hi guys, this is Marie, having you here, great to hear from you. In terms of churn, our second half outlook has not changed. In terms of churn, where we've seen elevated churns for this year, it's the same reasons that we discussed last-water, the additional uptake from the middle of the year that elevated our outlook.
In terms of churn in our <unk>.
Second half outlook has not changed.
In terms of churn, where we've seen elevated churn for this year. It's the same reasons that we discussed last quarter.
The additional uptake from the middle of the year that elevated our outlook for second half is really in the long tail of customers, we discussed a little bit how we address that is the plan.
Speaker Change: For second half, it's really in the long tail of customers. We discussed a little bit how we've addressed it as a plan already last quarter. But since then, Andrew and Greg have really dug into this specific topic. So I'll let Andrew add a little bit to this. But overall, our outlook and the reasons really haven't changed but our approach to how we manage it has. So Andrew? Yeah, hey, how are you?
You know already last quarter, but since then Andrew and Greg have really dug into this specific topic, so I'll, let Andrew.
Add a little bit to that but overall our outlook and the reason is really haven't changed but our approach to how we manage it so indra yeah, Hey, how are you.
Great. Thanks.
Alright.
Andrew Appel: All right, so on the, I think I alluded to it in the introduction, you know, our view on churn is that, you know, it ultimately comes from, you know, not delivering clients everything that they're.
So on the I think I alluded to it in the introduction.
Our view on churn is that.
Where it ultimately comes from.
Delivering clients everything that their expectations are so that's back to where we needed to delight. Our clients I think we've done that are beginning to like get our arms around it I tell them.
Andrew Appel: So that's back to like, we need to delight our clients. I think we've done that. We're beginning to like get our arms around it. I've held it.
Andrew Appel: for four hour workshops to go through the largest accounts that have any, you know, semblance of churn. We've got action plans in place. We've identified which ones are vendable, which ones are not, which ones are, you know, there's a time lag associated, but we are all over, kind of, called every account that's over a certain threshold. So that, to me, is like, you know, not long tail, whatever main tail churn. And then,
Or for our workshops that goes through the largest accounts.
Hey, Sam.
Semblance of churn we've got action plans in place, we've identified which ones are bankable, which ones are not which ones are.
There's a time lag associated but we're all over kind of call. It every account is over a certain threshold. So that to me is like.
Not long tail whatever may encounter.
And then concurrent with that we have.
Andrew Appel: I already launched one task force to look at a portfolio of I think 75.
<unk> already launched one task force to look at a portfolio of I think 75 accounts below a threshold all call it long tailed sure.
Andrew Appel: helps below a threshold, call it long tailed churn, for systematic solutions that will work across that portfolio. That's probably this second half of January's work is to then triage, because we do have a reasonably large long tail. My guess is we'll end up with four half-forces, four to six, each focus on some subset of something we buy.
For systematic solutions that will work across that portfolio.
That's probably this month second half of January is work is to then triage because we do have a reasonably large long tail. My guess is we'll end up with forecasts horses, Florida six each focused on some subset of something we bought.
Andrew Appel: because that, you know, from some acquisition that isn't really, you know, part of our, you know, tender prize corp standard, but our aspiration is to come up with a, you know, kind of a joint off, you know, an offer that will work for the bundle. So,
There is some acquisition that isn't really part of our enterprise core sandor, but our aspiration is to come up with a kind of a joint audio and offer that will work for the bundles. So.
Andrew Appel: You know, the first path for us is, you know, long tail transportation clients.
The first half for us is a long tail transportation clients.
Andrew Appel: that are smaller and so we are working, you know, with a, you know, an offer effectively to retain, you know, as many of those accounts as makes sense for them as clients, right?
That are smaller and so we are working with sort of with a you know an offer effectively.
To retain as many of those are chalcis as it makes sense for that as clients right.
Sure.
Great.
Speaker Change: Great. That's incredibly helpful. Thanks for that. And then, you know, I think it was either Andrew Greg who talked about the SI strategy. We would just love for you to talk a little bit more about that. I know it was a relatively native strategy prior to you both joining e2 open, but just any observations around the current state of the indirect channel and your confidence building it out priorities would be would be useful.
Incredibly helpful. Thanks for that and then I think it was either Andrew or Greg who talked about the <unk> strategy.
Would just love for you to talk a little bit more about that I know it was a relatively nascent strategy. Prior to you you both joining me to open but just any observations around the current state of the indirect channel and.
Your confidence building it out priorities would be would be useful.
Speaker Change: Yeah. Hey Adam, it's Greg good to talk with you. Yeah, look, I think if we look at all of the growth levers that exist in this business,
Yeah, Hey, Adam it's Greg good to talk with you.
Yeah look I think.
If we look at all of the growth levers that exist in this business.
Greg Randolph: Our SI channel provides one of the largest growth opportunities.
Our Si channel provides one of the largest growth opportunities.
Greg Randolph: of all of the opportunities that exist.
All of the of all the opportunities that exist as you know each opened has made significant investments over the last year in this market.
Greg Randolph: As you know, E2 Open has made significant investments.
Greg Randolph: over the last year in this market and those investments are starting to pay off you know the way I look at it is we've got a foundation in place now that we can build from and
And those investments are starting to pay off.
The way I look at it is we've got a foundation in place now.
We can build from and <unk>.
Greg Randolph: Much like what you hear from the new leadership at E2 Open.
Much like what you hear from the new leadership at each of them open.
Greg Randolph: We are challenged with execution excellence in a number of aspects.
We are challenged with.
Execution excellence in a number of aspects of our business sales, obviously is one of them.
Greg Randolph: of our business. Sales obviously is one of them and our approach to the SI Channel needed an uplift around execution as well, which is why I brought in a new leader for that business.
And our approach to the Si channel needed an uplift around execution as well, which is why I brought in a new.
New leader for that business he.
Greg Randolph: He is off to a very fast start. We have got core momentum from a pipeline perspective with each of our top SI partners. We see significant upside from this business. It is something, an area of growth that we're going to continue to invest in, continue to focus on. And again, we've made progress, but there is tremendous potential for this segment of our market.
He is off to a very fast start.
We have got the core momentum from a pipeline perspective.
With each of our top Si partners, we see significant upside from this business. It is something an area of growth that we're going to continue to invest and continue to focus on and again, we've made progress, but there is tremendous potential for this segment of our of our of our market.
Speaker Change: Yeah, hey, Adam, one small thing to add to it, Greg said. I think he said, wouldn't we think of SI? We think so.
Yeah, I, one small thing to add to what Greg said I think is when we think of as I would think of.
Yeah.
Speaker Change: major SI as well as the, you know, hyperscalers and the, you know, the Google clouds, hatchers, etc. So, so we think of it broadly and it's already contributed to a couple new accounts.
The major size as well.
Hyperscale or isn't it.
Google Cloud Azure et cetera. So.
So we think of it broadly and it's already.
<unk> contributed to a couple of new accounts.
Speaker Change: that we've added to our portfolio in the last, you know, this year, let's say.
And then we've added to our portfolio in the last this year, let's say.
Okay really helpful. Thanks for taking the questions.
Our next question.
Speaker Change: The next question comes from Taylor McGuinness with UBS, please proceed.
The next question comes from Taylor Mcguinness with UBS. Please proceed.
Taylor Mcguinness: Yeah, hi. Thanks much for taking my question. So the first one is you provided a lot of color on the changes in sales organization, but what ending are you in making those changes? Are there still bigger hires that need to be made? Still some restructuring that needs to happen. And just as we look into forks you and beyond, when are you expecting to see more stability in the sales force?
Yeah, Hi, thanks, so much for taking my question. So the first one is you provided a lot of color on the changes in the sales organization, but what inning are you in making those changes are there still bigger hires that need to be made still some restructuring that needs to happen in just as we look into <unk> and beyond when are you expecting.
To see more stability in the sales force.
Yeah, Hey, Taylor, it's Greg Thanks for the question.
Speaker Change: Yeah, hey, Taylor, it's great. Thanks for the question. Look, I think I would tell you, first and foremost,
Look I think I would tell you first and foremost I'm Super pleased with how the commercial organization has responded to the focus around being brilliant in the basics as I said last quarter.
Speaker Change: I'm super pleased with how the commercial organization has responded to the focus around being brilliant in the basics, as I said last quarter, and the focus around sales execution.
And the focus around sales execution.
Speaker Change: has been very well received. We saw, you know, if you remember, Taylor, from last quarter, I mentioned that we should start to see momentum.
<unk>.
Has been very well received we saw.
If you remember Taylor from last quarter, I mentioned that we should start to see momentum.
Speaker Change: over a two to three quarter period and quite frankly, I'm incredibly pleased with how the team has responded and we've established that momentum that I talked about.
Over a two to three quarter period.
Frankly, I'm incredibly pleased with how the team has responded and we've established that momentum.
And I talked about separating.
Speaker Change: Separating the professional services organization from the traditional sales team.
Separating the professional services organization from the traditional sales team has.
Speaker Change: has had a really positive impact on both our professional services of business as well as our traditional subscription business. So as I told my team, you know, our challenges
<unk> has had a really positive impact on both our professional services business as well as our traditional subscription business. So.
As I told my team.
Our challenges.
Speaker Change: are reasonably basic and straightforward and quite clear. We don't need
Our reasonably basic and straightforward.
And quite clear.
We don't need.
Sophisticated.
Speaker Change: sophisticated organizational changes to tap into our potential, going into the new fiscal year. So we're going to, we saw significant momentum around the things that we've implemented. We're going to stay the course and continue to capitalize on the momentum that we've established.
Organizational changes to tap into our potential going into the new fiscal year. So we're going to we saw significant momentum around the things that we've implemented we're going to stay the course and continue to capitalize on the momentum that we've established.
Speaker Change: Essentially, you know, what Andrew laid out in his opening remarks.
Essentially.
Andrew laid out in his opening remarks being laser focused on customer engagement and delighting. Our customers is our priority and will continue to build the processes on the <unk>.
Speaker Change: being laser focused on customer engagement and delighting our customers.
Speaker Change: is our priority and will continue to build the processes on the programs that drive that behavior and ultimately that engagement with our customers.
Programs.
The drive that behavior, and ultimately that engagement with our customers.
Speaker Change: Awesome. Appreciate it. And then just for my second question for Marie, a two-parter for you, if you don't mind. So it looks like you lowered the midpoint of the 4Q subscription revenue guide by roughly a point. But it still seems stronger, sequential quarter over quarter growth than what we saw in 3Q. So can you just comment on what you're seeing in the environment versus maybe your expectations that's driving down in some of the assumptions embedded?
Awesome I appreciate it and then just for my second question for Mary a two parter for you. If you don't mind. So it looks like you lowered the midpoint of the <unk> subscription revenue guide by roughly a point, but it still seems stronger.
So quarter over quarter growth in what we saw on <unk>. So can you just comment on what you're seeing in the environment versus maybe your expectations, that's driving that in some of the assumptions embedded and then as a follow up I know you weren't giving guidance for next fiscal year, but just as we look.
Marie Armstrong: And then as a follow up, I know you aren't giving guidance for next fiscal year, but just as we look on.
Marie Armstrong: into next year, would it be fair to use the four Q quarter over quarter growth as a starting point for sequential growth next year? If we assume that, you know, sales productivity.
Enter into next year would it be fair to you.
The <unk> quarter over quarter growth as a starting point for sequential growth next year, if we assume that sales productivity.
Marie Armstrong: maybe is expected to improve, maybe that, you know, could ultimately lead to better sequential growth, but anything you can share in terms of the person takes there, I think would be helpful.
It may be is expected to improve maybe that could ultimately lead to better sequential growth, but anything you can share in terms of the puts and takes there I think would be helpful.
Absolutely. Thanks for the question. So in terms of the first part of your question.
Speaker Change: So in terms of the first part of your question for Q4 guide, you know, overall, as you look at our guidance for second half,
Q4 guide overall as you look at our guidance for the second half our view hasn't changed right and so quarter to quarter as you, obviously know the timing of bookings churn even FX.
Speaker Change: Our view hasn't changed, right? And so quarter to quarter, as you obviously know, you know, the timing of bookings, churn, even effects can really impact, you know, the revenues quarter to quarter when you're looking at your growth rates, obviously, you know, the year ago, comps of the similar factors have an impact as well, so I wouldn't read into that, I wouldn't read that into that at all. I think what the message really is here.
Really impact the revenue for this quarter when youre looking at year over year growth rates obviously.
A year ago comps at the similar factors have an impact as well.
I wouldn't read into that.
I wouldn't read that into that at all I think the message really here is that our Q3 momentum in just the execution as we exited the quarter was materially improved versus Q2.
Speaker Change: our Q3 momentum and just the execution as we exited the quarter was materially improved versus Q2, which kind of gets to your second part of the question in terms of the quarter of a quarter improvement, obviously that has a positive impact.
To get to your second part of the question in terms of the quarter over quarter improvement, obviously that has a positive impact.
Speaker Change: sequentially for Q4 and also, you know, obviously Q4 in general is our, you know, just seasonally stronger quarter given the two kind of year-ends we have in our Q4, meaning the December normal year-end and then our own fiscal year-end in February . So, you know,
Essentially for Q4 and also obviously Q4 in general is R. J.
Just seasonally stronger product in late two coming up here as we have in our our Q4.
Meaning the December normal year end, and then our own fiscal year end in February so.
Speaker Change: We are very pleased to see sort of set of momentum, that execution and, you know, really having an impact from Greg and Andrew and the team on the, on the booking side and also just the sharp focus is outlined on turn that, you know, overall takes a bit longer to affect but we can.
We are very pleased to see sort of better momentum that execution.
<unk>.
Really having an impact from Gregg and Andrew and the team on that on the bookings side and also just a sharp focus as outlined on churn, but you know overall it takes a bit longer to effect, but we can.
Speaker Change: definitely see how the plan will start taking hold there as well.
Definitely see how the plan will start taking hold there as well.
Speaker Change: In terms of your last quote of your question, in terms of FY25, like you said, we don't guide to that yet. So the goal is to do everything you said, improve, continue to improve, get back to the growth rates that we should.
In terms of the your last part of your question in terms of FY 'twenty five.
Like you said, we don't guide to that yet so.
The goal is to do everything you said you know improve continue to.
Improve.
Get back to the growth rates that we should.
Speaker Change: have in double digits and you know build on the menu but it's going to take some time so you know again stay tuned to a point 25 times when when we
Having double digits in and build on the matter of fact, it's going to take some time, so again stay tuned into FY 'twenty <unk> guidance when when we.
Speaker Change: provided, but you know, where we sit now, we're very encouraged by the early time that we saw the squadron. Great. Thank you so much.
Provided.
Where we sit now we are very encouraged by the early signs.
That we saw this quarter.
Great. Thank you so much.
Thank you so much.
The next question comes from Mark Schappell with loop capital. Please proceed.
Speaker Change: The next question comes from Mark Shappell with Loop Capital. Please proceed.
Hi, Thank you for taking my question Andrew.
Mark Shappell: Hi. Thank you for taking my question. And we're starting with you. If I recall correctly, there were several ocean contracts that were coming up for renewal this year. And given that annual shipping volumes are down, wanting to give us a sense of whether you're starting to see ocean customers kind of renewing it at much lower rates and maybe give us a sense of, you know, any kind of step down your saying.
And we're starting with you if I recall correctly there were several ocean contracts that were coming up for renewal this year.
Given the annual shipping volumes are down I was wondering if you could give us a sense of whether you are starting to see ocean customers kind of renewing at much lower rates and maybe give us a sense of.
Any kind of step down you're seeing.
Speaker Change: Maybe I'll start a high. Thank you for the question. Maybe I'll start and I'll hand it over to Andrew. You know, the ocean volumes and carrier as Sharon would talk about previously. You know, that's fully embedded into our guidance because you see it and.
Maybe I'll start.
Thank you for the question, maybe I'll start and I'll hand, it over to Andrew.
The ocean.
Volumes of carrier as churn we've talked about previously that's fully embedded into our guidance as you see us and.
Speaker Change: And obviously, these are important customers to us and
Obviously these are important customers to us and.
Speaker Change: Both Andrew and Greg are very involved in working with them, so there's nothing really new in terms of surprises here necessarily, but I'll let Andrew add to that as well.
Apple Android Blackberry involved in working with them. So there is no nothing really new in terms of.
No surprises here necessarily but I'll, let andrew add to that as well.
Andrew: Yeah, not only at, we are in active, continuous discussion with all of our largest shipping clients, I think.
Yeah, I'll only add we are in.
Active continuous discussion with all of our largest shipping client I think.
Andrew: Our goal is to find new ways to serve them. We had a call this morning with.
Our goal is to find new ways to serve them, we have a call. This morning.
Andrew: the team on one of them to offset any volume-based relationship that we have with them with new solutions that will...
The team on one of them to offset any volume based relationship that we have with them with new solutions that will.
Andrew: helps them achieve some of their aspirations in terms of growing their business.
Helps them achieve some of their aspirations in terms of growing their business. So.
Andrew: You know, well, it's just the nature of client relationships, right, over time they migrate, right, if you keep trying to sell the same thing.
You know, it's just the nature of client relationships right over time, they migrate ray if you keep trying to sell the same thing.
Andrew: Then, you know, you'd be like selling an iPhone 6 today, right? So I just think that, you know,
You know you'd be like selling an iPhone six today right. So I'd just say.
No no.
Andrew: You have to refresh your services so I know especially some carriers of which I happen to be involved in two of the five or six. They're all about a little bit of that right volume metric coupled with here's three other things that we should be working on together.
You have to refresh the services in those discussions and carriers of which I happened to be involved in two of the five or six.
They're all about a little bit of that Greg volumetric, coupled with here's three other things that we should be working on together to grow the business.
Speaker Change: Great. Thank you. And then, Greg, a question for you with respect to the sales comp plans that you inherited when you came on board.
Great. Thank you and then Greg a question for you with respect to the sales comp plans that you inherited when you came on board.
Greg Randolph: Do you believe they're adequate or appropriate to generate the right level of sales productivity at the firm or do you think you need to make some changes to the compliance here?
Do you believe there are adequate or appropriate to generate.
The right level of sales productivity at the firm or do you think you need to make some changes to the comp plans here this year.
Yeah, Hey, Mark Great to hear from you.
Speaker Change: Yeah, hey, Mark, great to hear from you. Great question. Stills compensation, drive sales behavior, and it's super important.
Great question sales compensation drive sales behavior.
And it's Super important.
Speaker Change: I will tell you that I made some modifications.
I will tell you that I've made some modifications.
Speaker Change: For the second half, by the way, day one when I joined, I tweaked, made a modification to the comp plan to ensure the right behavior in the second half.
For the second half by the way day, one when I joined.
I tweak.
Made a modification to the comp plan to ensure the right behavior in the second half, but I will tell you. There has been one of the things that Lisa.
Speaker Change: But I'll tell you there's been one of the things that Lisa, our new operations leader in the commercial organization, is taking on is an initiative to simplify RFY25 comp plan. And I love a scenario where a sales organization is highly motivated and instanted.
A new operations leader in the commercial organization is taking on.
Is an initiative to simplify our FY 'twenty five comp plan and.
I loved the scenario, where our sales organization is highly motivated and incentive.
Speaker Change: to drive the behavior of the results in top line profitable growth.
To drive the behavior of the results in top line profitable growth.
Speaker Change: And she and I have done this before and she's in really at the final stages of finalizing the initiative.
And she and I have done this before and she then.
The final stages of finalizing an initiative.
Speaker Change: to put forth an optimized plan for next fiscal year. So I appreciate the question. It's something that we are super excited to roll it out, quite frankly.
To put forth.
And optimized plan for next fiscal year. So I. Appreciate the question, it's something that we are super excited to roll it out quite frankly.
Speaker Change: Yeah, let me out. Great. Thank you. Thank you. Thank you. Thank you. Thank you. You're welcome.
Let me great. Thank you.
I think what makes.
Greg It's done organizationally, which is folk refocus the organization on our separation from sales delivery.
Speaker Change: Re-focus the organization on a separation team to stay out, delivery, and the life, retention, whatever you want to call it.
Why protection or whatever you want to call it.
You know it makes the opportunity for simple like the pace of growth. That's what sales report, we want like we want to pay more sales cost because that makes or sell more stuff.
Speaker Change: You know, it makes the opportunity for simple, like, pay for growth. That's what they'll do before. We want to pay more sales, com, because that makes for sale more stuff. At the same time.
At the same time, I think we need to figure out how people get rewarded for even what you got.
Speaker Change: We need to figure out how people get rewarded for, you know, keeping what you got, which is a completely separate thing. Doesn't always have to be commissioned, doesn't always have to be something. People leave to feel like I get benefits from keeping not just from winning.
Which is a completely separate thing.
It doesn't always have to be commission doesn't always have to be something that.
I believe I feel like I guess benefit from keeping not just for women.
Speaker Change: And so, you know, that's also something we're focusing on together.
So that's also something we're focusing on it together.
Thank you.
Speaker Change: Okay, the next question comes from Chad Bennett with Craig Hallum. Please proceed.
Okay. The next question comes from Chad Bennett with Craig Hallum. Please proceed.
Great. Thanks for taking my questions. So just it is whether it's Andrew or Greg just as you meet with with clients in and review the product portfolio and all of the assets that the company has acquired over the years.
Chad Michael Bennett: Great, thanks for taking my question. So just as whether it's Andrew or Greg, just as you meet with clients and review the product portfolio and all the assets that the company has acquired over the years, just curious kind of, do you think everything
Just just curious kind of how do you think.
Everything kind of fits.
Chad Michael Bennett: in the platform or in the portfolio going forward. Just curious on kind of how you think about.
In the platform or in the portfolio going forward just curious on kind of how you think about the competitive positioning or product strength.
Chad Michael Bennett: competitive positioning or product strength within the different segments, where you think you're stronger or where you think you could improve.
You know with within the different segments, where you think you're stronger where do you think you could improve.
This is Andrew.
Chad Michael Bennett: This is Andrew look I point out that first the first three months have been very, you know
Look I'd point out that first the first three months has been very.
Laser focus on churn retention client civilizations and.
Chad Michael Bennett: laser focus on churn, retention, clients, implementations.
And.
Andrew: lighting new clients and booking. So I will say that that has been the focus where I will say in that
The lighting new clients with bookings so I will say that that has been the focus.
What I would say in that process.
Andrew: You know, I'm pretty impressed with the position of our main product lines. Nothing comes to mind, they're not in the portfolio reoptimization world. We're in the, you know, my grade, you know, all our clients to our latest versions of our grade product.
You know I'm pretty impressed with the position of our main product lines nothing comes to mind, where not in the portfolio re optimization world.
We're in the migrate all our clients through our latest versions of our great products.
Andrew: So, you know, we have a pretty significant R&D span that, you know, to make sure our products retain their competitiveness. And when we look in,
So.
You know, we have a pretty significant R&D spend that you know.
To make sure our products are saying our competitiveness.
And and when we look at non wins.
Andrew: They're not out of whack with what you'd expect in an industry with three or four players in each bike.
They're not out of whack with what you would expect that in the industry with three or four players in each Viper space.
Andrew: Yeah. And hey, this is Greg. I'm just adding that, you know, I've spent a lot of time with customers. The last 90 days, I've been to Europe twice. And throughout North America, I've got a West Coast tour next week. Focus on meeting with customers.
Hey, this is Greg I'll just add.
You know I've spent a lot of time with customers as thought in the last 90 days or into Europe twice.
Throughout North America, I've got a west Coast Tour next week.
Focus on meeting with customers.
Greg Randolph: I am super connected with Pawan, our head of product. He and I spend a lot of time talking about the future of our product platform, our competitiveness near term, and if I look at the wins that we had in Q3.
Im Super connected with the <unk>, our head of products.
I spent a lot of time talking about the future of our product platform.
Competitiveness near term.
And if I look at the wins that we had in Q3.
Greg Randolph: and the interactions I've had with our existing customers.
And the interactions I've had with our existing customers.
Greg Randolph: I am more energized and optimistic about our future than I've been since I've been here. And if I think about the value proposition that our existing customers get from our platform,
I am more energized.
And optimistic about our future.
They have been since I've been here if.
If I think about the value proposition that our existing customers get from our platform.
Greg Randolph: It's remarkable and if I think about the wins that that we experienced in Q3 and the level of value and honestly the competitiveness of our sales team was super impressive to be able to do.
It's remarkable and if I think about the wins that we experienced in Q3 and the level of value and honestly the competitiveness of our sales team.
Was super impressive to be a part of and so like any company that has you know.
Greg Randolph: And so like any company that has, you know, a broad product portfolio, we will always evaluate the fit to the market, but I couldn't be more excited about what we have to take to market and the value proposition that adjust across our portfolio.
A broad product portfolio, we will always evaluate the fit to the market.
But I couldnt be more excited about what we have to take to market and the value proposition that exists across our portfolio.
Speaker Change: Got it. And then maybe I appreciate the color. That's great. Um, just maybe on the on the, you know, as we look in the next year, and I understand you're not given guide in the next year, but
Got it and then maybe maybe I appreciate the color that's great just maybe on the on the.
As we look into next year, and I understand youre, not giving guidance for next year, but.
Speaker Change: You know, it appears this is obviously, as you've indicated, a multiple quarter transition in revenue.
It appears this is obviously as you've indicated a multiple quarter transition and in revenue.
Speaker Change: likely will be under pressure, you know, heading into next year, probably even the first half. Just in terms of the durability or sustainability of the EBITDA margins in that mid-30 range, is that something that is non-negotiable from your standpoint, Andrew?
We you will will be under pressure.
Heading into next year, probably even the first half.
Just in terms of the durability or sustainability of the the EBIT margins in that mid 30 range is that something that is non negotiable from your standpoint Andrew.
Sorry, I stepped away for a second it sounds like a marine question.
Speaker Change: Um, so either way, either way, sorry. Yeah, Maria and either one look. I think
So either way either way sorry, yeah.
Maria Andrew either.
Look I think.
Yes.
Speaker Change: Our castle and our margin are incredibly important to us to maintain the momentum that we have. So the short answer is yes. We're going to retain our target margin at the level that it's at. Today, um, you know, we
Our castle and our margins are incredibly important to us to maintain the momentum that we have so.
So the short answer is yes, we're going to retain our target margin at the level that it's at today.
We invested clients.
Speaker Change: and we invest in clients to make sure that they're excited about what we do. And I think we've demonstrated, even in the last couple months, that there's an ability to do that without changing the margin profile of the business.
And we invest in clients to make sure that they're excited about what we do.
And I think we've demonstrated even in the last couple of months. If there is an ability to do that without changing the margin profile of the business.
Got it I appreciate the color. Thanks, so much.
Okay.
Speaker Change: The next question comes from Andrew Oben with Bank of America, please proceed.
The next question comes from Andrew <unk> with Bank of America. Please proceed.
This is David Ridley Lane on for Andrew.
Speaker Change: This is David Ridley Lane on for Andrew. So your churn is expected to remain
So churn is expected to remain elevated.
David Ridley-Lane: elevated in the fourth quarter. You also noted churn decisions are made significantly in advance. So when do you expect sort of the changes in the work that you're doing to really read out in the reported churn metrics?
Elevated in the fourth quarter. You also noted churn decisions are made significantly in advance.
So when do you expect sort of the changes in the work that you're doing to really read out in the reported churn metrics.
Speaker Change: Yeah, hey, David. It's great to hear from you. Thanks for the question. Look, the reality is
Yeah, Hey, David It's Greg.
Great to hear from you. Thanks for the question.
The reality is.
Greg Randolph: We're seeing improvements every day in the approach we're taking to laser focus on serving our customers and delighting our customers, as Andrew said. And I think, you know, that the changes that we made going into the third quarter to focus
We are seeing improvements every day.
And the approach, we're taking to laser focus on serving our customers and delighting our customers as Andrew said.
And I think that the changes that we made going into the third quarter to focus our teams in the markets that.
Greg Randolph: in the markets that are best applicable to where they focus. For example, if you remember from last quarter,
Our best applicable to where they focus for example, if you remember from last quarter.
Greg Randolph: We separated the sales organization both PS and the commercial sales team, but within the commercial sales team, we also separated enterprise from what we call long tail, which is really the volume and velocity business, thousands of customers, thousands of transactions where we have experienced a recent increase in charm.
We separated the sales organization, both PFS and the commercial sales team, but within the commercial sales team. We also separating enterprise from what we call long tail, which is really the volume and velocity business thousands of customers thousands of transactions, where we have experienced.
The recent increase in churn.
Greg Randolph: By dedicating that team solely focused on the volume and velocity business, this wonky business, we've already seen signs of better visibility and to where we have risks.
By dedicating that team solely focused on the volume and velocity business. This long tail business, we've already seen size signs of better visibility into where we have risk improvement and recovering some of the churn that had been identified and.
Greg Randolph: improvement in recovering some of the churns that had been identified.
Greg Randolph: And more important building out a more strategic plan during the FY25 that not only protects that base of revenue, but creates a growth engine for that aspect of our business. As you know, Enterprise Software.
And more important building out.
Our strategic plan going into FY 'twenty five.
Not only protects that base of revenue, but creates a growth engine for that aspect of our business as you know an enterprise software you can't treat.
Greg Randolph: You can't treat, you know, a $15,000 transaction, the way you treat a seven-figure transaction, you can't treat a multi-billion-dollar company the way you treat a $400,000,000 company. So we're approaching those markets differently with different DNA, with a different daily approach.
We had a 50000 dollar transaction the way you treat a seven figure transaction you captured a multibillion dollar company. The way you treat a $400 million company. So were approaching those markets differently with different DNA with a different daily approach and we're starting to see signs from that approach.
Greg Randolph: And we're starting to see signs from that approach. The thing that Andrew mentioned in his opening remarks.
The thing that Andrew mentioned in his opening remarks.
Greg Randolph: You've got a commitment from the top of the organization to get super involved in every customer who has some level of dissatisfaction.
Or that you have got a commitment from the top of the organization to get Super involved in every customer who has some level of the SaaS fashion and.
Greg Randolph: Andrew and his leadership has created an atmosphere within this company to make customer success the number one priority when it's all said done. So we're just getting started. We've been at this for 90 days. We've seen significant improvement. The organization is rallying around this mindset and we're expecting to continue to see improvements as we continue to roll out the plan that we've articulated.
Andrew and his leadership has created an atmosphere within the company to make customer success. The number one priority when it's all said and done. So we're just getting started we have been asked us for 90 days, we've seen significant improvements that the organization is rallying around.
This mindset.
And we're expecting to continue to see improvements as we continue to rollout the plan that we've articulated.
Got it. Thank you for that and then just a question on bookings and I'm, just sort of reading reading the tea leaves here, where bookings are actually up year over year in the quarter.
Speaker Change: Thank you for that and then just a question on bookings and I'm just sort of reading reading the T-lays here We're bookings actually up here every year in the quarter
Okay.
Speaker Change: Thanks for the question, if you know, we know report bookings or your growth of those, but overall bookings are under pressure this year. We are encouraged by the better execution and better results than we anticipated, but again, we don't give specific guidance on bookings and your response there.
Thanks for the question as you know we know.
We don't report bookings and our year over year growth of those but.
Overall bookings are under pressure this year.
We are encouraged by the better execution and better results than we anticipated but again.
We don't give specific guidance on bookings and youre ready to transact.
Thank you very much.
Speaker Change: I would now like to turn the floor back to management for any closing remarks.
I would now like to turn the floor back to management for any closing remarks.
Yes.
Speaker Change: Yeah, I thought I would just close with a couple of
I thought I would just close with a couple of.
Speaker Change: Um, general messages that are very similar that we're sharing with our colleagues, which is, um,
General, Massachusetts are very similar that we're sharing with our colleagues wishes.
Speaker Change: One, I see myself as an operating execution-oriented growth CEO , so I am in every aspect of this business focused on the light.
Why.
I see myself as an operating execution oriented growth CEO, So I am.
In every aspect of this business focused on.
Delighting clients I was going to say I would share is never got until it's got I will fight for every pay.
Speaker Change: I was gonna say I'm sure it has never gone until it's gone. I will fight for every pet.
Speaker Change: Same thing with making sure we do light flights and implementations. Our goal is that they're leaving feeling like it's on budget on time and they're happy with excited with the work.
Same thing with making sure we do life clients in implementations. Our goal is that they are leaving feeling like it's on budget on time and they're happy with excited with the work.
Speaker Change: I am bringing, I think this operational discipline, frankly, that the three of us are bringing to this organization will have them met in past.
I agree I think this operational discipline frankly that the three of US are bringing to this organization will have an adverse impact.
Speaker Change: just been a missing, right? And it's a natural that when you grow through 14 acquisitions that you don't have that level of operational discipline to look at every single item as if it's your own, right? Treat it like it's your own money and you'll treat it differently.
It's just been a missing right and it's natural that when you grow through 14 acquisitions that you don't have that level of operational discipline to look at every single item as if it's your own great treat it like it's your own money.
Ill treated differently and treated those clients like you want to work with them for the rest of their life and then the next slides.
Speaker Change: treat those clients like you want to work with them for the rest of their life and then the next.
Speaker Change: So that's, you know, the third point, I think, you know, at the foundation of every great company are great products, right? That's the foundation. I've often said it starts with not losing the existing clients, but the way you do that is by delivering exceptional products. And I think, as I have reflected into the three months, I think here we have great products. Products are highly competitive in the marketplace. No product is perfect, but, you know, from external advice again.
So that's the.
The third point I think that's a fair.
Foundation of every great company, a great products right. That's the foundation.
Market said it starts with not losing the existing clients, but the way you do that is by delivering exceptional products and I think.
As I have reflected that in the three months of Premier rehab brake products products are highly competitive in the marketplace.
Product is perfectly from external advice again.
Speaker Change: You have pretty good, pretty good ratings from the products.
Pretty good pretty good ratings from our products.
The three of US are joined at the hip.
Speaker Change: three of us were joined at the hip. Greg, myself, Marie, Paoa, the L.P., joined at the hip.
Meg myself Murray power ELT joined at the half.
Speaker Change: It's very focused. You heard Greg saying more times than I said, that we're about to lighten clients.
Very focus you heard Greg say it more times than I said, there were about delighting clients and.
Speaker Change: And it's not that complicated, right? We've got to win new clients, keep the ones we got, and make sure that when we win them that we deliver our solutions with excellence. And to do that, I think about the word collaboration, right?
It's not that complicated right, we've got to win new clients keep the ones, we got and make sure that when we win them then we deliver our solutions with excellence.
And to do that.
I think about the word collaboration right when you're in a business suit I haven't it'd be all my life right. So I know that.
Speaker Change: When you're in a business, and I've been in B2B all my life, right? So I know that this is year 32.
Severe 32.
Speaker Change: serving businesses and the only way you serve businesses with this thing is you act like one team all the time
Our survey businesses and the only way you serve businesses with distinctiveness as Youre accurate one team all the time.
Speaker Change: collaborate and collaborate with the Light Clients.
Library and collaborate with delight clients.
Speaker Change: So, you know, we all watch a lot of NFL, right? You know, the team's, you know, the team's a win again. And everybody has a role to play.
And so you know we all watch a lot of NFL right.
You know it takes a team to win again.
And everybody has a role to play.
And so I am.
Speaker Change: feeling good about the first three months and I think we got a lot to do but I think you should leave the call knowing that you have folks that are laser focused.
Feeling.
Feeling good about the first three months in.
And I think we got a lot to do but I think you should leave the call knowing that you have folks that are laser focused.
Speaker Change: on making this a fantastic company through operational
Making this a fantastic company through operational execution, I mean, I'm looking at spreadsheets with clients, it's like a $5 at risk here sure I'll call them why not.
Speaker Change: And I'm looking at spreadsheets of clients. It's like, oh, $5 at risk? You sure? I'll call them. Why not?
So thank you.
This concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation.
Speaker Change: This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.