Q4 2023 Copperleaf Technologies Inc Earnings Call
At the call, we will conduct a question and answer session.
If at any time during this call we require immediate assistance. Please press star zero for the operator. This call is being recorded and she was named March 12 2020 for your hosts today are Paul Suck risky Chief Executive Officer of Copper-leaf, and Chris Allen, The company's Chief Financial Officer.
And Chief operating officer before we begin I am required to provide the following statement respecting forward looking information.
The call today, the company will make forward looking statements that are based on assumptions and therefore subject to risks and uncertainties that could cause actual results to differ materially from those projected the company undertakes no obligation to update these statements except as required by law you can read about the risks and.
<unk> bees and regulatory filings that were filed earlier today.
So the commentary today will include adjusted financial measures, which are non I FRS measures.
There should be considered as a supplement to and not a substitute for ifr S financial measures. They consultations between the two can be found in the company's regulatory documents, which are available on SEDAR plastic CAE or on our website. In addition commentary today. It will include key performance indicators that help evaluate the bed.
Good afternoon, and welcome to copper lead to fourth quarter 2000, <unk> results conference call.
At this time all lines are in a listen only mode. Following the call we will conduct a question and answer session.
This measure performance identify trends affecting the business formulate business plans and make strategic decisions such key performance indicators make be calculated in a manner different than similar key performance indicators used by other companies and with that I'd like to turn the call over to Mr. Pollack risky.
At any time during this call we require immediate assistance. Please press star zero for the operator. This call is being recorded in Tuesday March 12, 2020 for your hosts today are Paul Sikorski, Chief Executive Officer, Copper-leaf, and Chris Allen, The company's Chief Financial Officer.
Thank you. Please go ahead.
Chief operating officer before we begin I am required to provide the following statement respecting forward looking information.
Thank you very much and good afternoon, everyone. Thanks for joining us to discuss <unk> 2023 fourth quarter and full fiscal year performance.
During the call today, the company will make forward looking statements diabetes on assumptions and therefore subject to risks and uncertainties that could cause actual results to differ materially from those projected the company undertakes no obligation to update these statements except as required by law you can read about the risks in them.
Cited to provide an update of our progress and to have the opportunity to share some of their plans for the future.
As is our usual format I'll make opening remarks before handing it over to Chris to provide a detailed review of the financial results. Following Christmas in my prepared remarks, we'll open the call to questions.
Certainties and regulatory filings that were filed earlier today.
Coupled with the ability to generate substantial client valued by maximizing capital efficiency, managing risk and clearly aligning our clients business decisions with their strategic goals growth continued strong demand for our solutions in the fourth quarter of 2023.
Also the commentary today will include adjusted financial measures, which are non <unk> measures.
This should be considered as a supplemental and not a substitute for ifr S financial measures.
Filiation between the two can be following the company's regulatory documents, which are available on SEDAR plastic CA or on our website. In addition comments are today. It will include key performance indicators that help evaluate the business measure performance identify trends affecting the business formulate this does plans and make strategic.
This was highlighted by a 30% year on year increase in annual recurring revenue and a 21% year on year increase in subscription revenue. Additionally, and importantly, we ended the year with a record backlog of $139 5 million, marking a 30% increase year over year.
Jake this session.
Revenue growth in the fourth quarter was 11%, which as usual should be viewed in the context of our ongoing transition to a predominantly SaaS revenue model.
Such key performance indicators make be calculated in a manner different benchmark.
Pro forma indicators used by other companies and with that I'd like to turn the call over to Mr. Paul to Christie. Thank you. Please go ahead.
When taking into account our revenue mix, which is shifting towards subscription revenue and that we're entering the year with a stronger backlog, we expect overall revenue growth to accelerate in 2024.
Thank you very much and good afternoon, everyone. Thanks for joining us to discuss <unk> 2023 fourth quarter and full fiscal year performance I'm excited to provide an update of our progress and to have the opportunity to share some of the plans for the future.
Our fourth quarter results demonstrate the continuing momentum in our business and benefit that benefited from several operational changes that were implemented during 2023.
As is our usual format I'll make opening remarks before handing it over to Chris to provide a detailed review of the financial results.
Firstly, we added focus and dedicated resources to key areas of our client facing organization through the implementation of the global growth office at the beginning of 2023.
Increases in my prepared remarks, we'll open the call to questions.
Coupled with the ability to generate substantial client valued by maximizing capital efficiency, managing risk and clearly aligning our client business decisions with their strategic goals.
The key areas involved being partner ecosystem product industries and value engineering.
<unk> as we call it undoubtedly contributed to the improvement of the scalability effectiveness and efficiency of our global sales team during the year.
With continued strong demand for our solutions in the fourth quarter of 2023.
This was highlighted by a 30% year on year increase in annual recurring revenue and a 21% year on year increase in subscription revenue. Additionally, and importantly, we ended the year with a record backlog of $139 5 million, marking a 30% increase year over year.
In parallel with these enhancements to the client facing G. T. M. We introduced a dedicated business operations function to the global sales team and throughout the year, we added new internal functionality and pipeline management and visualization and also enhancements to the CRM sales comp coverage model planning and such.
Revenue growth in the fourth quarter was 11%, which as usual should be viewed in the context of our ongoing transition to a predominantly SaaS revenue model.
L team enablement this.
This has made a material difference to our forecast and granularity and has tightened up our sales processes as the year progressed.
When taking into account our revenue mix, which is shifting towards subscription revenue and that we're entering the year with a strong backlog, we expect overall revenue growth to accelerate in 2024.
In Q4, we also implemented a new global structure for our client facing services business, including implementation services client support and client focused development services.
Our fourth quarter results demonstrate the continuing momentum in our business and business benefited from several operational changes that were implemented during 2023.
Later ship at an aggregated global level. In addition to the existing regional view gives us a clear ownership of the global services revenue line as well as opportunities for process improvement and load balancing to improve utilization and efficiency on a global basis.
Firstly, we added focused and dedicated resources to key areas of our client facing organization through the implementation of the global growth office at the beginning of 2023.
In the end however, its all about the client experience and ownership of the end to end client lifecycle will further improve the copper-leaf experience for the client and ultimately the amount of revenue that we are the value that we deliver.
The key areas involves being partner ecosystem product industries and value engineering the.
<unk> as we call it undoubtedly contributed to the improvement of the scalability of effectiveness and efficiency of our global sales team during the year.
And thats good for the software business.
And competent in combination with our 2023 operating model refresh and supported by increasing industry demand for the functionality that we provide these strategic go to market investments have enabled increased partner traction accelerated lead generation increased customer satisfaction and acts.
In parallel with these enhancements to the client facing GTS, we introduced a dedicated business operations function to the global sales team and throughout the year, we added new internal functionality and pipeline management and visualization and also enhancement to the CRM sales comp coverage model planning and <unk>.
Celebrated adoption in new industries and geographies.
Sales team enablement this.
In 2023, this programmatic approach generated a lot of food that open up new market sectors and opportunities for future growth.
This has made a material difference to our forecast and granularity and has tightened up our sales prices as the year progressed.
During fiscal 2023 alone Copper-leaf expanded into the ports industry upstream oil and gas airports.
In Q4, we also implemented a new global structure for our client facing services business, including implementation services client support and client focused development services.
First oil and gas client in Europe, both water client in Asia Pacific with Sydney water and fifth transit rail client in the USA the Houston Metro It does.
Latest ship at an aggregated global level in addition to the existing regional.
Those last two sectors build on our success in EMEA and set the stage for global expansion in areas, where we're already well reference with recognized market leading companies.
It gives us.
Ownership of the global services revenue line as well as opportunities for process improvement and load balancing to improve utilization and efficiency on a global basis.
We also achieved key milestones and geographic expansion during the year.
In the end however, its all about the client experience and ownership of the end to end client lifecycle will further improve the copper-leaf experience for the client and ultimately the amount of revenue that the value that we deliver.
<unk> attracted a SaaS clients in France, Ireland, Italy, and the middle East as well as signing one of Brazil's largest integrated power utilities, establishing a new beachhead in Latin America.
And thats good for the software business.
We also had success extending our position where we're well established a great example of this is with the recent additions of Scottish water in the Irish water as the ninth and 10th water companies in the UK and Ireland to join the growing public community, they're demonstrating the continued success in that geography, and validating our industry spin.
In combat in combination with the 2023 operating model refresh and supported by increasing industry demand for the functionality that we provide the strategic go to market investments have enabled increased partner traction accelerated lead generation increased customer satisfaction and access.
Civic market strategy.
<unk> adoption in new industries and geographies.
In Q4, leading European network, operator, Eliana selected copper-leaf to optimize their asset investment planning.
In 2023, this programmatic approach generated a lot of things.
That open up new market sectors and opportunities for future growth.
They joined a growing group of energy and network companies in Europe, who are.
During fiscal 2023 align copper-leaf expanded into the ports industry upstream oil and gas airports.
Leveraging copper-leaf advanced capabilities to build decision transparency minimize risk maximize value.
Oil and gas client in Europe first water client in Asia Pacific with Sydney water and transit rail client in the USA Houston metric.
And face the energy transition with confidence and that's a key theme for us.
With also noting that only under the latest going to grow to a growing set of joint projects with Accenture and in addition to the acceleration of that direct business partners are playing an increasing role in the calculated global story.
Those last two sectors build on our success in EMEA and set the stage for global expansion in areas, where we're already well reference with recognized market leading companies.
During 2023, we continued to gain traction as our partners invested in expanding their couple of practice areas.
We also achieved key milestones in geographic expansion during the year.
Leif attracted SaaS clients in France, Ireland, Italy, and the middle East as well as signing one of Brazil's largest integrated power utilities, establishing a new beachhead in Latin America.
In the first quarter of 2023, Copper-leaf signed and endorsed apps initiative agreement with this AP and went on in Q2 to achieve premium certification, which put us on the SAP store and triggered the command commencement of cooperative go to market activities in the second half.
We also had success extending our position where we're well established a great example of this is with the recent additions of Scottish water in the Irish water as the ninth and 10th water companies in the UK and Ireland to join the growing public community the debt.
During the year. We also saw the deepening of copper based global relationship with Accenture.
As they assigned global partner resources to programmatically coordinated joint go to market activities across all global regions.
Demonstrating the continued success in that geography, and validating our industry specific market strategy.
Finally in Q4, copper leaf announced a strategic alliance with Siemens Smart infrastructure.
In Q4, leading European network, operator Ali <unk>.
Selected correlates to optimize their asset investment planning.
A leading provider of grid planning operations and maintenance software and the global domain expert in Palestine.
He joined the growing group of energy and network companies in Europe, who are.
Leveraging copper-leaf advanced capabilities to build decision transparency minimize risk maximize value.
Under this agreement <unk>, and Siemens will integrate technical planning with value based investment optimization to help utilities make investment decisions that accelerate the modernization of electricity grids to deliver on the increasing demand to decarbonize energy at greater capacity, while maintaining reliability.
And face the energy transition with confidence and Thats a key theme for us.
With also noting that only under the latest integrated growing set of joint projects with Accenture and in addition to the acceleration of that direct business partner is playing an increasing role in the calculated global story.
<unk>.
During the fourth quarter Copel <unk> hosted its first North American asset investment planning for them in Houston, Texas.
During 2023, we continued to gain traction as our partners invested in expanding their <unk> practice areas.
After successful event of the same type in Europe, and Asia Pacific, We brought together organizations from the oil and gas chemical transportation and utility sectors to discuss software supported asset investment planning and management can help maximize capital efficiency manage risk and access.
In the first quarter of 2023, copper Lakeside and endorsed apps initiative agreement with Asap and went on in Q2 to achieve premium certification, which put us on the.
Store and triggered the command commencement of cooperative go to market activities in the second half.
<unk> strategic outcomes.
During that conference, we heard testimonials from clients and partners as to the significance of asset investment planning and management generally.
During the year. We also saw the deepening of Copel as global relationship with extension as they assigned global partner resources to programmatically coordinate joint go to market activities across all global regions.
The value generated specifically by the copper Leach solution.
Yes, Sam highlighted how the integration between <unk> and SAP solutions creates a continuous feedback loop between planning and execution, enabling businesses to choose the right way to do and the optimum time to do it and then execute that work efficiently inaccuracy accurately across the asset lifecycle.
Finally in Q4, Copper-leaf announced a strategic alliance with Siemens Smart infrastructure.
A leading provider of grid planning operations and maintenance software and the global domain expert in Palestine.
Under this agreement copper late payments will integrate technical planning with value based investment optimization to help utilities make investment decisions that accelerate the modernization of electricity grids to deliver on the increasing demands to decarbonize the energy at greater capacity, while maintaining reliability.
Accenture elaborated on this topic by describing the business benefits and value that can be achieved by advancing asset management maturity.
One joined client of Accenture and <unk>.
Our U S based multinational energy company that embarked on the journey recently to improve asset and risk management and increase investment efficiency that company is realizing reductions in improvements not only in capital spend but also in O&M costs.
<unk>.
During the fourth quarter, coupled with hosted its first North American asset investment planning for them in Houston, Texas.
After a successful event at the same type in Europe, and Asia Pacific, We brought together organizations from the oil and gas chemical transportation and utilities sectors to discuss software supported asset investment planning and management can help maximize capital efficiency manage risk and.
Asset downtime and outage duration.
The success of this implementation lytic century to include both <unk> and <unk> solutions as foundational components in it.
Intelligent asset management offering.
We're excited about the ongoing development of the partner ecosystem product and I can clearly see the potential for incremental sales growth and deal acceleration as these partnerships deepened as we build references and as our pipeline of joint pursuit increases in materials.
<unk> strategic outcomes.
During that conference, we had testimonials from clients and partners as to the significance of asset investment planning and management generally.
And the value generated specifically by the copper Leach solution.
Yes, Sam highlighted how the integration between <unk> and SAP solutions creates a continuous feedback loop between planning and execution, enabling businesses to choose the right way to do and the optimum time to do it and then execute that work efficiently inaccuracy accurately across the asset lifecycle.
Innovation remains at the forefront of our business in 2023 as usual couple if delivered full product releases during the year and added numerous new features to the solution.
Our fourth quarter product update Inc. Added several innovative features such as improved scenario organization for those clients managing large numbers of what if scenarios and their systems.
Accenture elaborated on this topic by describing the business benefits and value that can be achieved by advancing asset management maturity.
The ability to create investments in carpellate portfolio directly from predictive analytics.
One joined client of Accenture and Copper-leaf.
And a new tranche of ESG related value models, which relate to greenhouse gas scope 123 and emissions.
Our U S based multinational energy company that embarked on the journey recently to improve asset and risk management and increase investment efficiency that company is realizing reductions in improvements not only in capital spend but also in O&M costs.
In addition, we were recognized for our innovation with the grant of an additional U S patent in Q4.
Our strategy is to continue our investment in R&D to maintain our rich forward looking roadmap of future innovations, including the introduction of emerging cloud services and AI enabled functionality.
Asset downtime and outage duration.
The success of this implementation lytic sent you to include both <unk> and SSD solutions, that's foundational components.
These innovations increase our technological leadership and also an opportunity for client engagement as we work on functional enhancements with existing clients through our cocoa life lab to Michigan.
Intelligent asset management offering.
We're excited about the ongoing development of the partner ecosystem product and I can clearly see the potential for incremental sales growth and deal acceleration as these partnerships deepened as we build references and does that pipeline of joy pursuit increases in materials.
ESG as we talked about earlier and in particular decarbonization of hot topics in our core industry sectors and Copel <unk> is increasingly seen as a key enabling technology to assist clients in achieving their goals at.
Innovation remains at the forefront of that business in 2023 as usual couple if delivered full product releases during the year and added numerous new features to the solution.
A couple if we'd been helping organization 10 strategic ESG objectives into action by offering a practical way to value and incorporate ESG metrics intercompany decision, making.
Our fourth quarter product update Inc. Added several innovative features such as improved scenario organization for those clients managing large numbers of what if scenarios and their systems.
We've also been practicing what we preach in ESG setting our own serious commitment to how we operate.
In 2023, we released our renewal Bureau, ESG report for the year ended December 31 2022.
The ability to create investments and calculate portfolio directly from predictive analytics.
This report details our responses to the recommendations outlined by the task force on climate climate related disclosures Tcf D and shares Copper-leaf progress and plan to address important ESG issues, including the impact of our software it has on our global community.
And a new tranche of ESG related value models, which relate to greenhouse gas <unk> emissions.
In addition, we were recognized for our innovation with the grant of an additional U S patent in Q4.
Our strategy is to continue our investment in R&D to maintain our rich forward looking roadmap of future innovations, including the introduction of emerging cloud services and AI enabled functionality.
Overall as a result of our continuous commitment to product innovation and sustainability.
Our refreshed go to market model and increasing partner traction. We expect continued robust pipeline growth in 2024 weighted again this year and towards the second half.
These innovations increase that technological leadership and are also an opportunity for client engagement as we work on functional enhancements with existing clients through a couple of these labs initiative.
These factors along with our accelerating revenue growth and disciplined approach to managing costs position us to make material progress back towards profitability. This year.
ESG.
We talked about earlier and in particular decarbonization of hot topics in our core industry sectors and Copel <unk> is increasingly seen as a key enabling technology to assist clients in achieving their goals at.
Lastly, the fourth quarter marked the completion of my first year as CEO of Copel <unk>, it's been a busy year and I'm very pleased with the progress that we've made as a team.
A couple if we'd been helping organization 10 strategic ESG objectives into action by offering a practical way to value and incorporate ESG metrics into company decision, making.
New operating model has begun to demonstrate effectiveness, which I think is reflected in the strong fourth quarter results.
Our business is growing again, well and I believe that we're on track to meet our strategic goals.
We've also been practicing what we preach in ESG setting our own serious commitment to how we operate.
I am confident we made the right investments and that we have the right strategy. We will remain focused on prudently managing cash and innovating across our entire business with the aim of driving execution in the near to medium term and leveraging the global business Foundation, we've established over the past few years for future profitable scaling and growth.
In 2023, we released our inaugural ESG report for the year ended December 30, <unk> 2022.
This report details our responses to the recommendations outlined by the task force on client climate related disclosures Tcf D and shares <unk> progress and plan to address important ESG issues, including the impact of our software has on our global community.
I'll now turn the call over to Chris to review, our financial results in some more detail.
Okay.
Thanks, Paul.
Good afternoon, everyone.
Overall as a result of our continuous commitment to product innovation and sustainability.
We're pleased to report that our fourth quarter 2023 results continued to deliver growth across our key financial metrics revenue for the quarter ended December 31, 2023 was $21 2 million, an increase of 11% compared to $19 2 million in the comparative period, driven primarily by an increase in subscription.
Our refreshed go to market model and increasing partner traction. We expect continued robust pipeline growth in 2024 weighted again this year towards the second half.
These factors along with our accelerating revenue growth and disciplined approach to managing costs position us to make material progress back towards profitability. This year.
In perpetual revenue and partially offset by a decrease in professional services revenue.
Our subscription revenue was $13 6 million for the quarter, an increase of 21% from the prior year, representing 64% of Q4 revenue as compared to 59% of revenue in Q4 2022 highlights our continued transition to SaaS.
Lastly, the fourth quarter marked the completion of my first year as CEO of Copel <unk>, it's been a busy year and I'm very pleased with the progress that we've made as a team.
New operating model has begun to demonstrate effectiveness, which I think is reflected in the strong fourth quarter results.
Subscription revenue continues to increase period over period, thanks to a steady increase in new clients as well as the expansion of existing clients.
Our business is growing again, well and I believe that we're on track to meet our strategic goals.
<unk> services revenue for the fourth quarter was $7 million compared to $7 6 million in the prior year and this segment represented 33% of Q4 2023 revenue and finally perpetual revenue for the fourth quarter was zero point $6 million or 93% increase compared to 0.3 million in the prior year and this segment represented 3%.
I am confident we made the right investments and that we have the right strategy will remain focused on prudently managing cash and innovating across our entire business with the aim of driving execution in the near to medium term and leveraging the global business Foundation, we've established over the past few years for future profitable scale again growth.
Q4 2023 revenue.
I'll now turn the call over to Chris to review, our financial results in some more detail.
Our annual recurring revenue at December 31, 2023 was $60 2 million or 30% year over year increase compared to $46 4 million at December 31, 2022.
Okay.
Thanks, Paul.
Good afternoon, everyone.
We're pleased to report that our fourth quarter 2023 results continued to deliver growth across our key financial metrics revenue for the quarter ended December 31, 2023 was $21 2 million, an increase of 11% compared to $19 2 million in the comparative period, driven primarily by an increase in <unk>.
As of December 31, 2023, our net revenue retention rate was 111% reflecting expansion within our client base on top of our strong renewal history.
As Paul mentioned revenue backlog was a record $139 5 million at December 31, 2023% to 30% increase from $107 3 million in the prior year. Moreover of the $139 5 million of backlog 78 million is due to be recognized as revenue within the next 12 months and this.
Ascription in perpetual revenue and partially offset by a decrease in professional services revenue.
Our subscription revenue was $13 6 million for the quarter, an increase of 21% from the prior year, representing 64% of Q4 revenue as compared to 59% of revenue in Q4 2022 highlights our continued transition to SaaS.
An increase of 46% compared to $53 3 million of 12 months backlog in the prior year.
Subscription revenue continues to increase period over period, thanks to a steady increase in new clients as well as the expansion of existing clients.
Gross profit for the quarter was $15 million, representing gross margin of 71% or 2% decrease from $14 7 million and a gross margin of 76% in Q4 2022 gross.
Professional services revenue for the fourth quarter was $7 million compared to $7 6 million in the prior year and this segment represented 33% of Q4 2023 revenue and finally perpetual revenue for the fourth quarter was zero point $6 million or 93% increase compared to zero point $3 million in the prior year and this segment represented three <unk>.
Gross profit margins decreased temporarily this quarter due to an increase in subcontractor costs and increased head count the decrease in gross profit margins for the full year was also due to a lower mix of perpetual and term based software license revenue.
<unk> for Q4 2023 revenue.
We reported an adjusted EBITDA loss of $5 million for the quarter compared to an adjusted EBITDA loss of $2 million in the prior year net loss for the quarter ended December 31, 2023 was $5 5 million or a loss of eight cents per share compared to a net loss of $2 4 million or a loss of three cents per share in the prior year.
Our annual recurring revenue at December 31, 2023 was $60 2 million or 30% year over year increase compared to $46 4 million at December 31, 2022.
As of December 31, 2023, our net revenue retention rate was 111% reflecting expansion within our client base on top of our strong renewal history.
We finished the quarter with a strong balance sheet with $34 1 million in cash and equivalents and $92 3 million in short and long term investments, placing us in a strong financial position to build on our advantage and further penetrate the investment planning in decision analytics market.
As Paul mentioned revenue backlog was a record $139 5 million at December 31, 2023% to 30% increase from $107 3 million in the prior year. Moreover, after $139 5 million of backlog 78 million is due to be recognized as revenue within the next 12 months and this is.
With our strong unit economics, we remain focused on making thoughtful long term investments that will drive accelerated growth through 2024 and beyond.
As we continue to expand our reach we are confident that our focus on operational excellence will drive best in class margins expand our leadership position in the growing decision analytics market and accelerate our path to profitability.
An increase of 46% compared to $53 3 million of 12 months backlog in the prior year.
Gross profit for the quarter was $15 million, representing gross margin of 71% or 2% decrease from $14 7 million and a gross margin of 76% in Q4 2022.
That concludes our prepared remarks, I'll now hand, the call back over to the operator and open it up for questions. Thank you.
Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press star followed by the one on your telephone keypad, you will hit a three pronged technology request questions will be taken in the order received should you wish to cancel your request. Please press star followed by the team.
Gross profit margins decreased temporarily this quarter due to an increase in subcontractor costs and increased head count the decrease in gross profit margins for the full year was also due to a lower mix of perpetual and term based software license revenue.
We reported an adjusted EBITDA loss of $5 million for the quarter compared to an adjusted EBITDA loss of $2 million in the prior year net loss for the quarter ended December 31, 2023 was $5 5 million or a loss of eight <unk> per share compared to a net loss of $2 4 million or a loss of <unk> <unk> per share in the prior year.
You're using a speaker phone please lift the handset before passing any Keith one moment. Please for your first question.
Your first question comes from the line of <unk> Becker from William Blair. Please go ahead.
Hey, gentlemen, nice job here, maybe starting with with Paul.
We finished the quarter with a strong balance sheet with $34 1 million in cash and equivalents and $92 3 million in short and long term investments, placing us in a strong financial position to build on our advantage and further penetrate the investment planning in decision analytics market with.
Called out kind of a building out of the partner ecosystem, but I wonder how you think about that kind of comprising that more into and perspective around the asset lifecycle as we move beyond just implementation and decisioning and decisioning to that opportunity for more kind of real time and predictive maintenance it sounded like maybe some partners where we're highlighting this.
With our strong unit economics, we remained focused on making thoughtful long term investments that will drive accelerated growth through 2024 and beyond as.
Conference, but and that value proposition would compound rate, but how do you guys think about that.
As we continue to expand our reach we are confident that our focus on operational excellence will drive best in class margins expand our leadership position in the growing decision analytics market and accelerate our path to profitability.
That opportunity over time.
Yes, Thanks John.
Good too.
Good to talk.
It's it's a it's a rich topic.
That concludes our prepared remarks, I'll now hand, the call back over to the operator and open it up for questions. Thank you.
And that is evidenced by the amount of activity I think associated with with asset management and manage the managing the end to end.
Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press star followed by one on your telephone keypad, you will hit a three pronged technology request questions will be taken in the order received should you wish to cancel your request. Please press star followed later too.
Asset lifecycle amongst our friends in the in the digitized environment. So.
There is a chain of asset management modules or products that go from system of record in the EAA EMS space.
We're using a speaker phone please lift the handset before passing any Keith one moment. Please for your first question.
You then go to things like asset performance management generally speaking in the industry has traditionally gone from system of record, where our assets and what are they what do they look like then you go into some predictive analytics in the ATM space. It throws off a laundry list of things that you should do and then it.
Your first question comes from the line of <unk> Becker from William Blair. Please go ahead.
Hey, gentlemen, nice job here, maybe starting with with Paul.
That kind of a building out of the partner ecosystem, but I wonder how you think about that kind of comprising that more into and perspective around the asset lifecycle as we move beyond just implementation and decisioning and decisioning to that opportunity for more kind of real time and predictive maintenance it sounded like maybe some partners, we're highlighting this or that.
It goes through a committee process that decide the timing and the alternatives associated with each of those necessary intervention and then it goes straight into work order management.
So you can notice a gap in the middle of the Copley filled very well and traditionally speaking we've been very focused within our envelope, but more and more we're integrating with the things on either side of us on one side of it is we've effectively got ATM on the other side of this we've got APM tools, we dovetail in very nicely.
Conference, but and that value proposition would compound rate, but how do you guys think about that opportunity over time.
Yes, Thanks John.
Good too.
Good to talk.
It's a rich topic.
There are a lot of competitors in those other spaces and there are very very few things that look like a couple of days.
And that is evidenced by the amount of activity I think associated with with asset management and manage the managing the end to end.
So the companies like Accenture, particularly have picked up on that end to end necessity linking up all of those things on an end to end basis and also the huge value in using cost software support like couple of ways to make sure that you're executing on these things in the the highest value.
Asset lifecycle amongst our friends in the digitized environment. So.
There is a chain of asset management modules or products that go from system of record in the E&S space.
So portfolio optimization against all of the different opportunities you had for intervention and then passing that into the execution tools like Primavera and Andy ppm downstream of US that then go into where crude management.
You then go to things like <unk>.
Asset performance management generally speaking then the industry has traditionally gone from system of record, where our assets and what are they what do they look like then you go into some predictive analytics in the ATM space. It throws off a laundry list of things that you should do and then it goes through a committee process.
And so accenture is linking up all of that end to end.
There are alternatives to most of those other software elements as you go through that into in China. Other than calculate we're really we're really they are the ones that work in that space.
Decide the timing and the alternatives associated with each of those necessary intervention and then it goes straight into work order management.
And I will take the opportunity to embellish a little bit on that where we you mentioned the word sustainment.
So you can notice a gap in the middle of the Copley builds very well and traditionally speaking we've been very focused within our envelope, but more and more we're integrating with the things on the side of us.
Asset Sustainment billon.
We can do that and we are best in class, but that specific thing in the end to end asset management chain. One of the key features of Copel <unk>.
Is that we can also introduce at that point optimization within the same portfolio of future asset related spend so assets that are going to be introduced either because of.
One side of this we've effectively got ATM on the other side of this we've got APM tools, we dovetail in very nicely with the there are a lot of competitors in those other spaces and there are very few things that look like a couple of days to companies like Accenture, particularly have picked up on that end to end necessity linking up all of those things.
Technological redundancy of current assets like for example, in the case of decarbonization or just expansion related future asset. So we can bring all of that in plus actually non asset related investments compete all of that the share of wallet at the enterprise and we are starting to see that.
On an end to end basis, and also the huge value in using cost software support like hopefully to make sure that you're executing on these things in the the highest value way to portfolio.
Amongst some of our clients, where they are starting off in asset sustainment, but they're starting to branch into putting in all of these things that demand capital and operational expense in human capital and all of the different resource.
Leo optimization against all of the different opportunities you had for intervention and then passing that into the execution tools like Primavera and Nd ppm downstream of US that then go into work or management.
So you can imagine competing all of that for share of wallet at the enterprise level and Thats something that really sets a couple weeks apart.
And so accenture is linking up all of that end to end.
Got it no that makes perfect sense I appreciate the detail there Paul maybe it's a good kind of segue to the second question, maybe for you and maybe for Chris as well too, but given again. These use cases are expanding and youre seeing incremental traction into some of these kind of newer.
There are alternatives to most of those other software elements as you go through that into in China. Other than Coppola. We're really we're really they are the ones that work in that space.
And I will take the opportunity to embellish a little bit on that where we you mentioned the word sustainment.
Verticals and around kind of some of the go to market investments. We've made are there any kind of.
Asset Sustainment Dillon.
Can do that and with best in class for that specific thing in the end to end asset management chain. One of the key features of Copper-leaf, though is that we can also introduce at that point optimization within the same portfolio of future asset related spend so assets that are going to be introduced either because of <unk>.
Early stage correlations that you can make.
And maybe some of your more mature markets like water, which continues to seem to track exceptionally well, that's giving you kind of early indication of hey, we've seen this playbook.
Play out and this is an early indication of a similar kind of adoption curve in aggregate is that seems to be another kind of valuable component here as well. Thanks.
Technological redundancy of current assets like for example, in the case of decarbonization or just expansion related future asset. So we can bring all of that in plus actually non asset related investments compete all of that the share of wallet at the enterprise and we are starting to see.
Yeah.
It's another good question because we are seeing this is kind of an emerging space.
Best practice around how you think about things like asset risk models, and how you accelerate your the way you think about assets from.
That amongst some of our clients, where they are starting off in asset statement, but theyre starting to branch into putting in all of these things that demand capital and operational expense in human capital and all of the different resource types. You can imagine competing all of that the share of wallet at the enterprise level and Thats something that really sets <unk> apart.
And initially at the time based replacement process and then you think okay. What condition of my asset and then you start thinking about risk.
On that evolutionary kids couple leaf is right up at the top end, where you're really thinking about the value that those those those assets generate and you think about your interventions and how much you put into those assets based on how much value that generate.
Got it no that makes perfect sense I appreciate the detail there Paul maybe it's a good kind of segue to the second question, maybe for you and maybe for Chris as well too, but given again. These use cases are expanding and youre seeing incremental traction.
So I think.
What we're starting to see is the industry sectors and vertical.
In countries, particularly with where the thinking on this is a little bit more advanced the UK is one of those Australia is one of those they starting to standardize around asset risk models.
For example in the.
In the distribution industry in the U K there's a.
Standard for asset risk models called CNET, it's a standardized set of risk models.
Coded for that a number of years ago, as we were starting to rollout.
Dsos in the U K, but we've seen that because we have those codes with coated public domain coding.
Coding so we've put all of that into our value model library, we've seen demand for that in Japan, Australia, and New Zealand the U S.
These best practice areas, where we've been there for the journey and we've helped to develop the best practice and certainly helped to ensure that that best practice thinking is practically applied.
To the to the company's decision, making we're taking that and.
Seeing that there's huge demand for that expertise and best practice knowledge internationally and that's helped us in the number of accounts or accounts globally. We're saying the same thing in water I think we can expect to see the same thing in rail and transit and <unk>.
It's an emerging space and we feel like we're at the forefront of it.
Great. Thanks, Paul I appreciate it.
Thank you and your next question comes from the line of Gavin Fairweather from Carmike. Please go ahead.
Oh, Hey, good afternoon, we're kind of tune a bit years on from the big ramp in the Salesforce, So probably be a good time to check in on on the productivity of the extended team and where that's tracking to expectations and maybe we can just touch on kind of the pipeline from this cohort entering 'twenty four.
Yes, thanks, Kevin.
We're tracking to expectations, our expectations are pretty high I would say that it's improving and getting better through the year.
I would say that we're getting better at tracking some of those metrics as well.
The improvements that we've made in our business operations function, which at the moment is effectively a sales operations function.
The folks that we've put in there are very experienced in enterprise software sale.
So a lot of these these metrics were tightening up on attracting so I'd say that it's improving as we go through the year.
We're certainly not at the point, where we've tapped out capacity and so I think that there are good productivity gains to be had.
Within the existing sales force, which is which is good for us from a cost management point of view.
And.
We've seen just anecdotally, we've seen some of our newer account executives.
Deliver their first deals well ahead of the of the average for copper late because we calculate it.
And often in new industries, and sometimes in new industries, and new geography, So I think.
I think there are a few things playing into that I think we're getting better at sales enablement.
I certainly think that our brand is improving our reference cases.
Better.
But also I think that potentially where.
We're getting better at hiring the the sorts of people who can tell the copulate story. The best So all of those things have to happen in concert and by no means that we made in their own internal expectation, but things are definitely improving.
Good to hear and you touched on sales enablement, which I think is a plug for the global growth office are you finding that the value engineering and industry expertise.
Within our offices is kind of moving the needle on sales cycles and helping some of those earlier deals kind of move faster through the funnel.
Yes, and the way that we're structured you're inadvertently conflating two things there the sales enablement sits more in the in.
The business operations group.
Global growth office has value engineering.
Fairly early days for both of those things, but we've obviously been working on sales enablement and since we've had salespeople.
I think we are becoming a bit more programmatic about it and we've got dedicated resources associated with that now.
People, who who effectively live and die by the effectiveness of our sales force and improving that those metrics. So thats in the business operations function.
Value engineering is moving the needle and absolutely will move the needle.
We're really asking our clients to make.
A very big confident bet on <unk>, and it's largely focused on ROI and the value that we generate.
And they need to believe that value and that doesn't come from a from a simple calculation that these numbers.
You've got to have really compelling value cases, which are built out of client data and expressed in language that the clients can really understand so it's not it's not something you can take a cookie cutter approach to especially at the large strategic enterprises that we work with.
You have to build bespoke value cases, we've now got dedicated resources associated with that and that is moving the needle.
And it'll help us with.
It always helps if you've got terrific reference ability and thats in your core industry.
Those references is the key the key tool for convincing new clients to come into the into the system, where youre a little bit new and you don't have huge reference ability or are you looking for ya.
Client in a new geography in a new geography, or a new industry vertical.
<unk> engineering really comes into its own.
Because it's just that next level of proof that the value of the system.
The other thing about making a decision to go with calculators that as you go through the sales cycle and you understand what it is you're really being asked to make a pretty big cultural shift in your business. So there's a lot of business process reengineering that is gonna be inherent in a couple of these implementation things stay the same and while there is huge value in that you have to.
Straight that value because the.
People are always a little bit nervous about.
Big change and they really need to understand that this is a great big pay off at the end of it and I think we're getting better at articulating that through value engineering and through the training of our sales force to make sure that they can articulate that value proposition.
I appreciate the color just lastly from me maybe just checking in on services I think you called out in Q2 and Q3, some some project delays.
<unk> billings and I saw you had a subcontractor mix as you know.
Impacted margins and utilization so what's the outlook kind of entering 2024 for kind of billings that utilization and margin on that services business.
Yes, thankfully, we're taking a pretty good backlog into the year.
So we've got we've got a lot to execute on.
The as.
As you've probably seen from our gross margins.
Utilization has been a little low.
As we've been going through the 2022 and 2023 market conditions.
They are starting to get a lot more a lot more utilized as we go into 2024. So that's a good thing.
From a macro point of view, you'll have noticed that we left the macro economic environment description out of that tool track today and out of the out of most of the releases that we've made in this cycle for a bit tired of talking about it to be honest, we're not economists.
And we're not we're not 100% sure whether it's going to improve or get worse, depending on all the different factors, but we are getting better at executing on it.
Going back to the value point, just making sure that our clients really understand the value of what we do versus everything else that they're doing is also a help.
There'll be less apt to delay something that's that's all to higher value and if they understand the value that comes out of the <unk> implementation. It would obviously be the first thing that they do and I think we're getting better at that.
Client engagement is another thing our client success managers, we're pretty well covered in our installed base.
We have advocates that are working hand in glove with our clients to make sure that there are that they are happy and we're leading in through those processes.
I think from a client engagement point of view, we're getting better at influencing that agenda, but we're not seeing any different gas.
Gavin if that's what you're asking in terms of whether their capacity is freeing up or whether the macroeconomic environment as is.
Is improving to the extent that they are going to be opening there.
And and driving forward in all of these things in parallel.
We're not seeing a huge number of delays.
And I think it probably is decreasing but it's hard to unpick. It from just the general market environment and us getting better at advocating Brussels a decline.
I did notice that thanks for all that color I'll pass the line.
Thanks, Ken.
Thank you and your next question comes from the line of John as much.
Multiple partners from the capital markets. Please go ahead.
Hi, good afternoon.
Paul with respect to SAP and <unk>.
The partnership ramp.
I know, it's a global partnership but at this stage are there specific geographies specific verticals, where you're seeing the most traction or.
Are there pockets of success.
Across multiple geographies and verticals.
A good question and it depends a little bit on which partner.
I would say I would say generally speaking the engagement has been pretty broad based globally.
We've been deliberately trying to drive it in that direction.
Generally speaking.
We do and it does depend a little bit.
Particularly when you kind of do an accenture, which is a very large organization.
It's called the same thing globally, but but quite often there are different approaches and different.
<unk> empathy locally.
So you can engage globally, but you also need to engage locally and.
I think it comes down to sometimes the chemistry between the between the local players, but we are trying to drive global programs.
Siemens is just a little bit different with co innovating with Siemens and we've selected some clients, which are largely north American based because that's where it's easiest for copper-leaf, particularly to bring its way with where we had most established more recognized but we also have more resources. So that we can bring the best of best of Coppola.
To those test cases that we're building with Siemens.
So that one's just a little bit different but most of them.
Couldn't pick a patent necessarily as to as to where we're strong and.
And where we're where we are lagging a little bit but.
It comes down to.
The relationships on the ground.
Global relationships are very strong and in programmatic.
Great and.
I guess from a vertical perspective could you provide maybe some more color.
Allocated can you quantitatively just regarding how the mix evolving.
Utilities versus.
Other verticals I mean, clearly the other verticals are growing but.
Would you still say that utilities might be three quarters of the pipeline or.
Do you think that that ratio.
Yes, the two utilities, the utilities is still front and center for us.
It'll take a while for those other things to catch up and largely it's about reference ability.
We get a start and you've got one reference by the time, you've got two or three or four references spread across global geographies, you start to generate a bit more momentum.
Obviously, we have that in the in the core sectors.
And those are still lastly utility utility focused.
We're also seeing the.
Following wins in those in those utilities, particularly the power sector.
Power is going through a 100 year cataclysmic change the globe is the whole the whole global economy is electrifying.
And those power utility that really front and center of the energy transition and most of them now coalescing around numbers like they need to have three X of Forex, the capacity and the distribution and transmission grid.
And they need to decarbonize as they do that.
Huge challenges and challenges that you might as well just design them exactly for the problem that copel they've solved so.
I think I think we're well referenced in those industries, but also a lot of the key issues facing the world at the moment there are concentrating into those into those utility industries as well. So there's a couple of mutually sustaining trends there that are that are there.
Extending.
The loss of our utility businesses.
Yes, plus with great hardly penetrated globally.
We still need to remember, where we are where even in our core our core in our core markets. We're still we're still looking at largely widespread.
Thanks for that color Paul best of luck.
Thank you.
Thank you and your next question comes from the line of Paul Treiber from RBC.
Go ahead.
Alright, thanks, very much and good afternoon.
Just wanted to if you can make a high level comment or just sort of get your perspective on.
Your comment about making material progress to profitability, how should we think about the balance between driving towards improved profitability versus the that.
The need to continue to make growth investments here.
Yes, it's a great question and.
I'll I'll invite my colleague Chris to jump into your anytime but.
And to keep me honest on my comments, but it's it's quite honestly a discussion we constantly have internally.
Actually we put in a fair bit of capacity well ahead of the kids.
So we use the IPO funds for that purpose and that was always the strategy and it was the reason quite frankly, one of the very key driving reasons that we IPO Ed was to have the resources to ramp up and accelerate we put in a fair bit of capacity.
We all we're all aware that the economy in 2022, and 2023 wasn't everything that we wanted it to be and so we still have a reasonable amount of that capacity and we've deliberately retained the capacity rather than making any any adjustments because we feel like we've made the right the right call and it takes us.
Fair amount of time to come into <unk> and ramp up we know that the market is accelerating in the market is coming back to us. So so keeping the team together was exactly the right thing to do and it lands us with good tenured experienced.
Capacity to prosecute on a big chunk of 2024 and.
On a good amount of 2025, we will need to start adding some capacity too.
The quota carrying sales force and billable consultant and the people that directly support those efforts.
But those are those are largely read it revenue generative.
The other thing I would say is that.
From the IPO funds.
And.
Post the IPO and even even slightly prior we made this decision to globalize and we put in the structure that we need with the leadership that we need in most places globally.
Including all of the enabling functions like business partners finance and human resources in contract and other out in the in the regions. We put in the superstructure that we need to run a global business.
Adding capacity underneath that we can do that much closer to the kids and generally speaking at much less cost, but does not increase in a linear fashion without revenue.
So the path back to profitability for us feels very clear and also based on our history. The unit economics of that deals have always been good we ran for a decade, 50% CAGR growth of our balance sheet effectively.
And so profitability is actually where we've spent most of their careers at a couple of days and so it's not a it's not unusual territory for us theyre getting back there after a period of <unk>.
Building out a global structure is is something that we're pretty confident about and we've had an extreme focus on cost over the past 12 to 18 months to make sure that there was revenue shortfalls are falling to the bottom line with managed to offset quite a lot of that.
Chris any.
Anything to add on that.
No I think you've covered all of the things I was going to kind of.
Okay. That's that's really does that answer your question, yes, I know its helpful to get your perspective there.
Okay Secondly.
Secondly, this is around the cadence for growth are you now seeing are our accelerated up to 30%.
The highest it's been for a couple of years now.
Really good to see.
Should we think about that as.
SAS driving SaaS growth up to that 30% level was there something unusual about Q4 that maybe raise that that <unk> a high watermark then maybe.
We shouldnt expect to SaaS.
SaaS out going forward.
I'll take a crack at that one Paul So Q4 is our you know.
Typically our big quarters, that's where it's it's pretty normal for us to book, 40% to 50% of our business. So it's not abnormal for us to see a bit of a tick up in the Q4s.
I think what Youre looking at is it you know.
Year over year comparison.
And two.
2022, just wasn't a stellar year for us as far as the bookings year, but where we are operating here in the last couple of years, you know high twenties thirties, as where where we belong really considering the.
The opportunity that's in front of us the town the white space the expansion opportunity because <unk> is really the you know.
Pretty healthy dose of both expansion of existing clients and the addition of brand new clients.
And so we should expect that to continue.
Okay, that's great to hear all of that pipeline.
Thanks, Paul.
Thank you and your next question comes from the line of John <unk> from National Bank.
You can.
Yes, Thanks for taking my question. So it seems like a lot of activities in our partnership ecosystem. So far so regarding the new customer win announced recently so how much of this is actually coming from partner or partnering.
Are you, sorry, I kind of missed the middle bit the glitch a little bit on the little bit of your question. So I think I missed the key piece can you reiterate sorry about that yeah, yeah for sure.
Seems like a lot of activities in our partnership ecosystem in the past couple of quarters. So regarding your.
Your new customer wins announced.
Recently, so how much of them are actually partner influenced.
Quite a like an increasing number of deals or partner influenced.
I don't think that were quite seeing yet the uptick in partner initiated a partner originated deals from from the new partnerships.
Our average deal cycle from start to close on an app on a broad average with very wide margins on the on the extremes is around about 19 months.
So most of these things happened during the course of last year and so.
Yet to see the fruits of that I think.
Other than the fact that the pipeline for joined pursuits with those new those new partners is building.
But we we've been at the partner game for a long time companies like Accenture, and Pwc and cap Gemini and black and veatch and other things.
Not new to us.
We've been building our ecosystem almost since the inception of the company and so partner.
Influenced deals.
Our increasing generally speaking year on year.
Chris I'm not sure whether you want to put any more numeric around that.
Yes.
For <unk> we are.
Differentiating John between partner influenced and partner initiated.
Mainly due to the new push to make sure that we've got those partners around us to make a jointly going to market.
Okay. Thanks for the colors and support in the past conversation remember you talk about the client capacity constrained just wondering any updates on that front.
Yeah, like I was saying before I think our I think we are.
Probably getting better at advocating for ourselves at the client I mean.
We're competing with other software implementations and in fact other initiatives that they have.
From a management bandwidth point of view.
I think the more we articulate the value of getting.
A couple a system up and running.
And make sure that the management and the decision makers at our clients have bought into that value I think that that we will we will see our.
Our implementations come to the fore and be prioritized.
I think we're getting better at that so it's a little bit along the same theme John.
As the sales effort, we compete for share of wallet against other things that the client wants to do we compete for share bandwidth against other things that the client has in the pipeline and need to do particularly in the it.
Departments, where they are pretty pretty overworked with.
With migrations to the cloud et cetera, but I think under those conditions, where they where our clients are constrained.
We are getting better at making sure that we had a prioritized.
Ask okay.
Thanks, again, a powerful line.
Thank you. Your last question comes from the line of Todd Coupland from CIBC. Please proceed.
Hi, yes, good evening everyone.
I wanted to circle back to the questions on growth in costs.
On our backlog so.
<unk> away from I guess.
The answer just before the last question was.
It's not a change in the market.
It's a low comp in 'twenty two is that is that the messaging.
So I think again.
You're talking about the <unk> question and just the cadence of IRR.
If you look quarter over quarter. This.
This whole year 2023.
It's all.
You know high Twenty's Q4 ended at 30 and as we were just you know I was indicating to Paul I think that's that's where we live.
I will make I did make the.
The connection back to Q4, which.
It was probably a disappointment for us as far as bookings for the year, but as SaaS continues to increase as we move away from perpetual towards SaaS and as we continue to execute on our you know our overall strategy and penetrate the markets that we're in.
Absolutely see the mid mid to high 20% to 30% IRR, absolutely achievable over the longer term.
Okay.
And then the 40% increase in the backlog, what's the takeaway on that or 39% increase in the backlog.
30 <unk> what's.
Yeah. It was a 30% increase in backlog overall I think maybe what you heard on the conference call I alluded to the next 12 months.
So our total backlog ending December 31, the total backlog was $139 5 million. So it's a.
We're happy with the results. So Q4 bookings came in largely as we expected. So that's a that's a good result as compared to December 31, 2022. So that's good and in addition, what I pointed out on the call was that if you look at our remaining performance obligations in our financials.
What is due to be recognized as revenue in the next 12 months.
Is about $78 million and that is an improvement again compared to.
At December 31, 2022, or what was going to be recognized in the next 12 months at that point so again.
Total bookings in 2020 to Q4 of 2022 wasn't necessarily what we wanted we entered the year as we've said on previous calls with a lower backlog that we wanted.
In contrast, exiting 2023, we're entering 2024 with a very.
Good backlogs.
Alright.
And the question on Opex is it ticked down over the course of the year I think if I got the numbers right $26 million at 21 5 million in Q4 Q1 to Q4 is the run rate in Q4.
Reasonable number to think about I mean, you talked about how you add capacity just needed incrementally add salespeople where needed.
Yes.
Just talk about whether or not that's a good run rate number to use.
No it will definitely ticked up in Q1 again.
As Paul mentioned and as I've mentioned in previous calls clearly we've been.
Managing the business the cost management has been a key focus for us throughout the year.
But with <unk>, it's a new year, so obviously CPI for all our existing head count full run rates of all of that head count.
Full.
Incentive contribution and incentive compensation accruals for the full year. So we'll definitely see it tick back up in <unk>.
In 2024 for Q1, but again overall, we see 2023 being our peak was last year for us and making way our way back to profitability in 2024, okay.
Okay.
That's good and then sorry last question.
You talked about how generative AI discussion had gotten away and some decisions how is that.
How does that play out at the end of the year and into this year. So far just just talk about the impact on us.
Deal close rates and any any comments on product roadmap would be helpful. As well thanks a lot.
Yeah, I mean, I think that the.
The proof of the putting us in the is in the bookings.
For Q4, I mean, we forecast that bookings can be pretty much landed landed where we forecast and so that's that's a positive sign in and of itself I think the the discussions about generative AI getting in the way of decisions and potentially.
Creating confusion in the minds of our clients as to whether we would be.
Be somehow replace buying.
Our magic AI tool.
Those were concerns rather than things that we actually saw in the market and.
The concern that we would naturally highlighting from a business risk point of view at the at the peak of the fever, the introduction of things like <unk> four and in the middle and early days of last year.
I would say that they didn't really.
Eventuate.
I don't think that we've seen situations where conversations around Oran.
Around generative AI have delayed any deal.
If anything we've been having good discussions with clients about how.
And just segue into our into the second part of your question, how we might employ generative AI to make their lives a little bit easier.
The impasse telephone conferences, we've talked about bringing.
Generative AI and the power that they have to affect natural language either.
Faces with the occasional user.
Certainly part of our forward looking Janney.
And we continue to invest in that and we expect that will come out with some with some product enhancements in 2024 associated with that.
From a product roadmap point of view.
We're very focused on ensuring that we're taking full advantage of all of the micro services that the that the cloud hyper scale is have to have to offer and making sure that we have a cloud strategy that is applicable to the majority of our market segments.
And that's an emerging space in and of itself you know the cloud the cloud partners I think they are becoming more and more accepted even by companies and potentially geographies that that have been a bit conservative in terms of moving into the cloud and away from the on premise implementation, we're still seeing an ongoing.
Migration alone and an ongoing comfort with moving on premise to the cloud, that's obviously being driven by the big ERP companies and the big technology companies, like SAP, and Oracle and Microsoft and.
And IBM.
We are part of that trend as well and.
We're working hard on ensuring that we're just absolutely well placed to take advantage of all of that brings us and there are certain specific aspect of our software they do.
Lend themselves very nicely. They are taking full advantage of some of the cloud micro services and generative AI, particularly for the occasional user who comes into the system every six months and and requires a very intuitive user interface, which is more of a natural language than it is.
Super user experience. So all of that's part of the part of the product roadmap coming forward.
Thanks, a lot for the color appreciate it.
Thanks, Tom.
Thank you there are no further question at this time, Mr. So Chris Keith. Please proceed.
Yeah. So thank you everybody.
For running through our full fiscal year 2023, and Q4 results.
Appreciate all the great questions and we will see you again, when we announced Q1 results for 2024.
You will.
Thank you that concludes your conference today. Thank you for participating you may all disconnect.