Q2 2024 Enghouse Systems Ltd Earnings Call

Video technology has been adopted in the UAE to drive a national rollout of their telehealth application across Abu Dhabi.

Unknown Executive: Rollout of their telehealth application across Abu Dhabi. At the start of the quarter, we completed the acquisition of MediaSight, which brings some new video products for the education and event market, which capture video content from educators and presenters and then push it into learning management systems for later consumption. This technology is also used in healthcare. For example, we have a healthcare customer that captures complex lung transplant operations with the MediaSight video capture software and then uses it to train other surgeons to perform these complex operations.

Unknown Executive: of their telehealth application across Abu Dhabi. At the start of the quarter, we completed the acquisition of Mediasite, which brings some new video products for the education and event market, which captures video content from educators and presenters and then pushes it into learning management systems for later consumption. This technology is also used in health care.

Speaker Change: At the start of the quarter, we completed the acquisition of MediaSight, which brings some new video products for the education and event market, which capture video content from educators and presenters, and then pushes it into learning management systems for later consumption.

Unknown Executive: For example, we have a health care customer that captures complex lung transplant operations with immediate site video capture software and then uses it to train other surgeons to perform these complex operations. IPTV is another growth area of Enghouse over the last several years since our IPTV launch. We have continually signed a number of new IPTV customers across North America. The growth of IPTV is driven by several factors, including the shift in consumer behavior towards on-demand content, as opposed to traditional cable TV's rigid programming schedules. Subsequent to the quarter, we completed the purchase of C-Change, which enhances our IPTV offering and expands us into Europe. C-Change results will start in Q3.

Speaker Change: This technology is also used in healthcare.

Speaker Change: For example, we have a healthcare customer that captures complex lung transplant operations with the media site video capture software and then uses it to train other surgeons to perform these complex operations.

Unknown Executive: IPTV is another growth area of Enchelles. Over the last several years since our IPTV launched, we have continually signed a number of new IPTV customers across North America. The growth in IPTV is driven by several factors, including the shift in consumer behavior towards on-demand content as opposed to traditional cable TV rigid programming schedules.

Speaker Change: IPTV is another growth area of inch house.

Speaker Change: Over the last several years, since our IPTV launched, we have continually signed a number of new IPTV customers across North America.

Speaker Change: The growth in IPTV is driven by several factors, including the shift in consumer behavior towards on-demand content, as opposed to traditional cable TV rigid programming schedules.

Unknown Executive: Subsequent to the quarter, we completed the purchase of C-Change, which enhances our IPTV offering and expands us into Europe. C-Change results will start in Q3.

Speaker Change: Subsequent to the quarter, we completed the purchase of C-Change, which enhances our IPTB offering and expands us into Europe . See-Change results will start in Q3.

Unknown Executive: Across many of our products, there is rising demand for software as a service. We invested for several years in training and enabling our go-to-market teams, developing and acquiring SaaS products, as well as setting up our own SaaS offering. And now we're seeing far more SaaS deals being signed than we did a few years ago. Hopefully, this provides you with some visibility and examples of the diverse markets we operate in and the growth opportunities they provide. Let me turn the call over to Mr. Steve Sadler.

Unknown Executive: Across many of our products, there is rising demand in Software as a Service. We invested for several years in training and enabling our go-to-market teams developing and acquiring SaaS products, as well as standing up our own SaaS offering, and now are seeing far more SaaS deals being signed than we did a few years ago. Hopefully this provides you some visibility in examples of the diverse markets we operate in and the growth opportunities they provide.

Speaker Change: Across many of our products, there is rising demand in software as a service.

Speaker Change: We invested for several years in training and enabling our go-to-market teams, developing and acquiring SaaS products, as well as standing up our own SaaS offering, and now are seeing far more SaaS deals being signed than we did a few years ago.

Speaker Change: Hopefully this provides you some visibility and examples of the diverse markets we operate in and the growth opportunities they provide. Let me turn the call over to Mr. Steve Sadler.

Stephen Sadler: Let me turn the call over to Mr. Steve Sadler.

Stephen J. Sadler: Thanks, Fitz. In the quarter, as previously mentioned, we completed the acquisition of the assets of MediaSite. After acquisition, MediaSite went into bankruptcy as its major creditor requested payment of its secured loan. This has made integration of the purchase assets a little more difficult with respect to assistance from the company, but financial results added to revenue and profitability in the quarter, the first quarter after acquisition. We expect some further improvement in Q3.

Stephen Sadler: Thanks, Fitz.

Stephen Sadler: In the quarter, as previously mentioned, we completed the acquisition of the assets of the media site. After acquisition, media site went into bankruptcy as their major creditor requested payment of its secured loan. This has made integration of the purchase assets a little more difficult with respect to assistance from the company. But financial results added to revenue and profitability in the quarter, the first quarter after acquisition. We expect some further improvement in Q3.

Speaker Change: Thanks, Fitz. In the quarter, as previously mentioned, we complete the acquisition of the assets of media site.

Speaker Change: After acquisition, Media Site went into bankruptcy as their major creditor requested payment of its secured loan. This has made integration of the purchase assets a little more difficult with respect to assistance from the company.

Fitz: But financial results, added to revenue and profitability in the quarter, the first quarter after acquisition. We expect some further improvement in Q3.

Stephen Sadler: We completed the acquisition of C-Change, again as mentioned, May 9, which has been integrated into our IPTV business unit of our AMG Group segment. The asset integration is proceeding as expected, and it will add to revenue and profitability in Q3. No financial results from this acquisition are included in Q2 as a result of the acquisition date after Q1.

Stephen J. Sadler: We complete the acquisition of C-Change again, as mentioned, on May 9, which is being integrated into our IPTV business unit of our AMG Group segment. The asset integration is proceeding as expected, and it will add to revenue and profitability in Q3. However, no financial results from this acquisition are included in Q2 as a result of the acquisition date after Q1.

Speaker Change: We completed the acquisition of C-Change, again, as mentioned, May 9th, which is being integrated into our IPTV business unit of our AMG group segment.

Speaker Change: The asset integration is proceeding as expected, and it will add to revenue and profitability in Q3. No financial results from this acquisition are included in Q2 as a result of the acquisition date after Q1.

Unknown Executive: We continue to see capital allocation opportunities in our industry sectors.

Stephen J. Sadler: We continue to see capital allocation opportunities in our industry and in our industry sectors. I would now like to open the call to questions. Thank you.

Speaker Change: We continue to see capital allocation opportunities in our industry sectors. I would now like to open the call for questions.

Unknown Executive: I would not like to open the call for questions. Thank you, and ladies and gentlemen, we will now begin the question and answer session. To ask a question, you may press a star, then the number one on your touchstone phone. If you're using a speaker phone, please speak up your handset before pressing any keys. To withdraw your question, please press the star followed by the number. Number two, one moment please for your first question.

Operator: Thank you. And ladies and gentlemen, we will now begin the question and answer session. To ask a question, you may press a star, then the number one on your touchstone phone. If you're using a speakerphone, please pick up your handset before pressing any keys.

Speaker Change: Thank you. And ladies and gentlemen, we will now begin the question and answer session. To ask a question, you may press a star, then the number one on your touchstone phone. If you're using a speaker phone, please pick up your handset before pressing any keys. To withdraw your question, please press the store, followed by the number two.

Operator: To withdraw your question, please press the star followed by the number. One moment, please, for your first question. And your first question comes from the line of Daniel Chan with TD Cowen. Please go ahead.

Speaker Change: One moment please for your first question.

Daniel Chan: And your first question comes from the line of Daniel Chan with TD Cowan. Please go ahead. Hi, good morning. Two parts for my first question on these on the SaaS opportunity: are you seeing mostly new customers choosing the SaaS solution, or are you seeing a migration of existing customers? And then part two is how much of your customer base is now on SaaS and what proportion do you think will move over?

Speaker Change: And your first question comes from the line of Daniel Chan with T.D. Cowen, please go ahead.

Daniel Chan: Hi, good morning. There are two parts to my first question. First, on the SaaS opportunity, are you seeing mostly new customers choosing the SaaS solution, or are you seeing a migration of existing customers? And then, second, how much of your customer base is now on SaaS and what proportion do you think will move over?

Daniel Chan: Hi, good morning. Two parts of my first question. On the SaaS opportunity, are you seeing mostly new customers choosing the SaaS solution or are you seeing a migration of existing customers? And then part two is how much of your customer base is now on SaaS and what proportion do you think will move over?

Stephen Sadler: So let me start on that question. So I think we're seeing it both. So we're seeing our existing customers moving from their on-prem to either a private cloud dedicated for them or our multi-tenant cloud products. So we have a cloud uplift program that is getting good traction, as well as we're seeing new logos in terms of percentage of our customer base that moved over. We won't disclose exactly that amount, but it's not a majority yet.

Unknown Executive: So let me start on that question. I think we're seeing both.

Speaker Change: Please see the complete disclaimer at https://sites.google.com

Speaker Change: So let me start on that question. So I think we're seeing it both. So we're seeing our existing customers

Speaker Change: moving from their on-prem to either a private cloud dedicated for them or our multi-tenant cloud products. So we have a cloud uplift program that is getting good traction.

Speaker Change: as well as we're seeing new logos. In terms of percentage of our customer base that moved over, we won't disclose exactly that amount, but it's not a majority yet.

Unknown Executive: Okay, thank you.

Unknown Executive: So we're seeing our existing customers moving from their on-premises to either a private cloud dedicated to them or our multi-tenant cloud products. So we have a cloud uplift program that is getting good traction, as well as new logos. In terms of the percentage of our customer base that moved over, it's, you know, we won't disclose exactly that amount, but it's not a majority yet.

Stephen Sadler: And then Steve, you did a bit of share repercussions in the quarter. Can you talk about how do you think about doing more of that given where your share prices relative to them in 8 targets you have in your pipeline? Yes, I mean, we look at how we allocate their capital out, and the price of our stock has come down a little bit, making it a good buying opportunity for us as well as others. We do not, we do like others not taking their positions in it, but we are looking at that buyback program, and we can only do so, of course, when we're not in a blackout period.

Speaker Change: Okay, thank you. And then Steve, you did a bit of share repurchases in the quarter. Can you talk about how you think about doing more of that, given where your share prices relative to the M&A targets you have in your pipeline?

Stephen J. Sadler: Okay, thank you. And then Steve, you did a bit of share repurchases in the quarter. Can you talk about how you think about doing more of that given where your share prices are relative to the M&A targets you have in your pipeline?

Stephen J. Sadler: Yes, I mean, we look at how we allocate our capital out and the price of our stock has come down a little bit, making it

Stephen J. Sadler: Yes, I mean, we look at how we allocate our capital out, and the price of our stock has come down a little bit, making it a good buying opportunity for us as well as others. We do like others not taking their positions in it, but we are looking at that buyback program, and we can only do so, of course, when we're not in a blackout period.

Stephen J. Sadler: a good buying opportunity for us as well as others. We do like others, not taking their positions in it, but we are looking at that buyback program, and we can only do so, of course, when we're not in a blackout period.

Unknown Executive: Thank you.

Stephanie Price: And your next question comes from the line of Stephanie Price with C-A-B-C. Please go ahead.

Stephen J. Sadler: Thank you.

Operator: And your next question comes from the line of Stephanie Price with CIBC. Please go ahead.

Stephen J. Sadler: And your next question comes from the line of Stephanie Price with CIBC. Please go ahead.

Erin Kyle: Hi, good morning. It's Erin Kyle on for Stephanie Price. And so I wanted to ask on the SAS and maintenance revenue this quarter. The last quarter there was some sequential decline in the maintenance, which was mainly attributed to life size. Just wondering on this quarter with the SAS and maintenance flat quarter of a quarter, did you see some more churn in Life Size in the second quarter? And would you say things have stabilized there now?

Erin Kyle: Hi, good morning. It's Erin Kyle on for Stephanie Price.

Speaker Change: Hi, good morning. It's Aaron Kyle on for Stephanie Price.

Unknown Executive: So I wanted to ask about the SAS and maintenance revenue this quarter. So last quarter, there was some sequential decline in maintenance revenue, which was mainly attributed to life size. Just wondering about this quarter, with the SAS and maintenance revenue flat quarter over quarter, did you see some more churn in life size in the second quarter? And would you say things have stabilized there now?

Aaron Kyle: So I wanted to ask on the SAS and Maintenance revenue this quarter. So last quarter there was some sequential decline in the maintenance, which was mainly attributed to life size. Just wondering on this quarter with the SAS and maintenance flat quarter over quarter, did you see some more churn in life size in the second quarter? And would you say things have stabilized there now?

Unknown Executive: Yes, hi, Aaron and Vince. Yeah, so life size did see some decline in Q3. That was mainly attributed to customers that churned prior to the acquisition who had already kind of given notice because Life Size went into receivership, and some customers knew they were in financial trouble. So we had the kind of tail end of that. So we don't expect to see, you know, a drop as significant as a drop next quarter. We think we're through most of that. And that was mainly in their SaaS products, by the way; not their on-premises ones; they didn't really have as much on-prem.

Stephen Sadler: Yes, higher in instance. Yeah, so Life Size did see some decline in Q3. That was mainly attributed to customers that churned prior to the acquisition, who had already kind of given notice.

Aaron Kyle: Yes, hi, Aaron instance. Yeah, so life size did see some decline in Q3. That was mainly attributed to customers that churned

Stephen Sadler: Because Life Size went into receivership, and some customers knew they were in financial trouble. So we had to kind of tail end of that. So we don't expect to see, you know, as significant a drop next quarter; we think we're through most of that. And that was mainly in their SAS products, by the way, not there. They didn't really have it as much on print.

Aaron Kyle: prior to the acquisition who had already kind of given notice because

Aaron Kyle: Life Size went into receivership and some customers knew they were in financial trouble. So we had the kind of tail end of that. So we don't expect to see, you know, as significant as a drop next quarter. We think we're through most of that.

Aaron Kyle: And that was mainly in their SaaS products, by the way. They didn't really have as much on-prem.

Unknown Executive: Okay, thank you. That's a full color there. And then maybe if I could just ask one more on the demand environment. So we've been hearing from some companies that IT spending is slowing as enterprises think about their AI strategy. So just curious from what you're seeing, how much would you say that AI is having an impact on decision making?

Erin Kyle: Okay, thank you. That's a helpful color there.

Aaron Kyle: Okay, thank you, that's helpful color there.

Speaker Change: And then maybe if I could just ask one more on the demand environment. So we've been hearing from some companies that IT spending is flowing as enterprises think about their AI strategy. So just curious from what you're seeing. How much would you say that AI is having an impact on decision making?

Unknown Executive: And then maybe if I could just ask one more on the demand environment. So we've been hearing from some companies that IT spending is slowing as enterprises think about their AI strategy. So just curious, from what you're seeing, how much would you say that AI is having an impact on decision making?

Stephen Sadler: Yeah, I can take that one. I mean, like I mentioned in Maya. Earlier, you know, we don't see AI taking a dent in context center purchases. We see interest in using AI to try to make the agents better and more productive. And remember, in our market, we're focused on sort of mid to lower upper segment of the market. So somewhere between 50 agents and 1000, so that that's the market we plan. And we're not seeing any, you know, friend towards getting rid of agents soon. And using AI. You have to realize to do AI. It really just goes in and looks at a large database, and it on helps the agents answer questions or answer questions.

Unknown Executive: Yeah, I can. I can take that one. I mean, like I mentioned earlier, we don't see AI taking a dent in contact center purchases; we see interest in using AI to try to make the agents better and more productive. And remember, in our market, we're focused on sort of the mid to lower upper segment of the market. So somewhere between, you know, 50 agents and 1000. So that's the market we play in, and we're not seeing any, you know, trend towards getting rid of agents and using AI.

Speaker Change: Yeah, I can take that one. I mean, we, like I mentioned in my, uh,

Speaker Change: And remember, in our market, we're focused on sort of mid to lower upper segment of the market, so somewhere between, you know, 50 agents and 1,000, so that's the market we play in. And we're not seeing any, you know, kind of trend towards getting rid of agents and using AI.

Unknown Executive: You have to realize, AI really just goes in and looks at a large database and, you know, and helps the agents answer questions or answer questions. So that really impacts the large contact centers a lot more. We're in the midsize, so we haven't seen really any impact of AI other than helping us reduce costs and maybe get a little bit more revenue by using it, but it hasn't impacted anything on our customers.

Speaker Change: You have to realize to do AI, it really just goes in and looks at a large database and helps the agents answer questions or answer questions.

Stephen Sadler: So that really impacts the large contact centers a lot more. We're in the mid size. So we haven't seen really any impact of AI other than helping us reduce costs and maybe get a little bit more revenue by using it. But it hasn't impacted anything in our customers.

Speaker Change: So that really impacts the large contact centers a lot more and we're in the mid-size. So we haven't seen really any

Speaker Change: any impact of AI other than helping us reduce costs and maybe get a little bit more revenue by using it, but it hasn't impacted anything in our customers.

Unknown Executive: All right. Thank you so much.

Unknown Executive: All right, thank you so much.

Speaker Change: All right, thank you so much.

Paul Treiber: And your next question comes from the line of Paul Treiber with RBC Capital Markets. Please go ahead. Thanks so much for your morning to start. Can you elaborate on the integration challenges of media sites in light of the bankruptcy there? And then do you think it will have that the bankruptcy will have an impact in the long term revenue that you expect out of that business.

Operator: And your next question comes from the line of Paul Treiber with RBC Capital Markets. Please go ahead.

Speaker Change: And your next question comes from the line of Paul Triber with RBC Capital Markets, please go ahead.

Paul Michael Treiber: Oh, thanks very much. Good morning. Can you elaborate on the integration challenges of Mediasite just in light of the bankruptcy there? And then do you think it will have an impact on the long-term revenue that you expect out of that business?

Paul Michael Treiber: Oh, thanks very much, good morning. Just to start, can you elaborate on the integration challenges with the media site just in light of the bankruptcy there? And then do you think it will have that the bankruptcy will have an impact in the long-term revenue that you expect out of that business?

Stephen Sadler: Okay. I think the challenges are we thought we'd have a team there that would help because they kept a couple of products, Visible and GLX, which we did not buy. Therefore, they still had staff left that we thought would help with the integration and moving systems over. When it hit the bankruptcy side, that staff, of course, left or some of them left. So that made it difficult to move some of the systems over. So we basically had to do it ourselves and couldn't rely on the transfer agreement that we did with that.

Unknown Executive: Okay, I think the challenges are we thought we'd have a team there that would help because they kept a couple of products, Venable and GLX, which we did not buy. Therefore, they still had staff left that we thought would help with the integration and moving systems over. When it hit the bankruptcy side, the staff, of course, left, or some of them left. So that made it difficult to move some of the systems over.

Paul Michael Treiber: Okay, I think

Speaker Change: The challenges are we thought we'd have a team there that would help because they kept a couple products, Vittable and GLX, which we did not buy.

Speaker Change: Therefore, they still had staff left that we thought would help with the integration and moving systems over. When it hit the bankruptcy side, that staff, of course,

Speaker Change: left or some of them left. So that made it difficult to move some of the systems over so we basically had to do it ourselves and couldn't rely on the transfer agreement that we did with them.

Unknown Executive: So we basically had to do it ourselves and couldn't rely on the transfer agreement that we did with them. In the future, for that, we don't think we, in fact, we think it might be positive for us once we are organized. We're larger, we serve customers better. We don't see a big issue with the future.

Stephen Sadler: In the future for that, we don't think that we, in fact, we think it might be positive for us once we are organized where larger we service customers better. We don't see a big issue with the future.

Speaker Change: In the future for that, we don't think, in fact, we think it might be positive for us once we are organized. We're larger, we service customers better, we don't see a big issue with the future.

Stephen Sadler: Yeah, just to add on it, the media site customers obviously we spoke to a lot of their customers subsequent to the quarter. And there's no real concern. They're actually happy that, you know, it's landed on an interest in an interest with the strong financial situation. And the products there, Paul, are really sticky products like they're in schools, they're, you know, they're embedded in the education system. So a very stable product, some really interesting use cases in health care. So I think it's positive from the customer side.

Unknown Executive: Yeah, just to add to that, the media site customers, obviously, we spoke to a lot of their customers subsequent to the quarter, and there's no real concern; they're actually happy that, you know, it's landed on Enchouse, in Enchouse with a strong financial situation. And the products there, Paul, are really sticky products, like they're in schools, they're, you know, they're embedded in the education system. So they're a very stable product. Some really interesting use cases in healthcare, so I think it's positive from the customer side.

Speaker Change: Vibs, do you want to? Yeah, just to add on it, the media site customers, obviously we spoke to a lot of their customers subsequent to the quarter.

Vibs: And there's no real concern. They're actually happy that, you know, it's landed on Ench House, in Ench House with a strong financial situation. And the products there, Paul, are really sticky products. Like, they're in schools, they're...

Speaker Change: You know, they're embedded in the education system. So a very stable product, some really interesting use cases in healthcare. So I think it's positive from the customer side.

Stephen Sadler: And then shipping gears to the contact center space, you know, I'm sure you saw that the announcement from Microsoft in their contacts and are offering. How do you think about the increasing or sustained competition within the contact center space, and it seems like AI has been a catalyst for companies to. Or vendors to make more investments in contact centers, do you see. The Competition, I do you see that AI impacting competition, increasing competition, do you think to be more switching, more, you know, turn potential as a result of that?

Paul Michael Treiber: And then shifting gears to the contact center space. I'm sure you saw the announcement from Microsoft about their contact center offering. How do you think about the, you know, increasing or sustained competition within the contact center space? And it seems like AI has been a catalyst for companies to, or vendors to make more investments in contact centers? Do you see The competition, how do you see that AI impacting competition, increasing competition, do you think there will be more switching, more, you know, churn potential as a result of that?

Speaker Change: And then shifting gears to the contact center space, I'm sure you saw the announcement from Microsoft in their contact center offering.

Speaker Change: How do you think about the increasing or sustained competition within the contact center space? It seems like AI has been a catalyst for companies or vendors to make more investments in contact centers. Do you see...

Speaker Change: The competition, how do you see that AI impacting competition, increasing competition? Do you think there be more switching, more, you know, churn potential as a result of that?

Stephen Sadler: Paul, I think the context center has been going through a transition for some time. We sort of see it the same way as we see AWS. I think if you remember a year or two ago, you thought they announced they were going to get into the business, and we really haven't seen them. They all come in, but you have to have a resource to go there, and it's not as easy as just doing an order; you have to implement them. So again, we're always watching our competition. We think AI from Microsoft is great. Haven't seen them, but we deal with them now in the context center.

Unknown Executive: Paul, I think the contact center has been going through a transition for some time. We sort of see it the same way as we see AWS. I think if you remember a year or two ago, you thought they announced they were going to get into the business, and we really haven't seen them. They all come in, but you have to have a resource to go out there and It's not as easy as just doing an order; you have to implement them.

Speaker Change: Paul, I think the contact center has been going through a transition for some time.

Speaker Change: We sort of see it the same way as we see AWS. I think if you remember a year or two ago, you thought they announced they were getting into the business and we really haven't seen them. They all come in, but you have to have a resource to go out there and

Unknown Executive: So again, we're always watching our competition. We think AI from Microsoft is great. Haven't seen them, but we deal with them now in the contact center, we tie into their teams, and so we have a working relationship there anyway.

Speaker Change: It's not as easy as just doing an order. You have to implement them. So, again, we're always watching our competition. We think AI from Microsoft is great.

Speaker Change: I haven't seen them, but we deal with them now in the contact center. We tie into their teams, and so we have a working relationship there anyway.

Stephen Sadler: We tie into their teams, and so we have a working relationship there anyway. So we only can take the futures; the future comes, but we're pretty knowledgeable and we watch it fairly closely to find out what the real impact is versus what the news says it is. Lots of people make news, but they don't do very much.

Unknown Executive: So we can only take the future as it comes. But we're pretty knowledgeable about it, and we watch it fairly closely to find out what the real impact is, versus what the news says it is. Lots of people make news, but they don't do it very well.

Speaker Change: We only can take the future as the future comes, but we're pretty knowledgeable and we watch it fairly closely to find out what the real impact is versus what the news says it is. Lots of people make news, but they don't do very much.

Stephen Sadler: And then just lastly for me, just on the M&A environment. M&A has, for N Joe, said it has picked up. You know, what are your thoughts on the environment here? Are you seeing sellers more willing to sell, or are they still, you know, hoping that they would find other buyers or higher prices?

Unknown Executive: And then just lastly, for me, just on the M&A environment. I mean, M&A has, for Enghouse, picked up. What are your thoughts on the environment here? Are you seeing sellers more willing to sell? Are there still, you know, hopes that they would find other buyers or a higher price?

Speaker Change: And then just lastly for me, just on the MNA environment, I mean, M&A has, for NGOs, it has picked up,

Speaker Change: You know, what are your thoughts on the environment here? Are you seeing sellers more willing to sell, or there's still, you know, hopes that they would find other buyers or higher prices?

Stephen Sadler: I think you find, if you look at our major competition, which you know, Summer Public, you can see their results in private. Some of them took the approach many years ago, but they were going to spend lots of money. Take loans to do it and scale by basically getting revenue below its cost. And there's substantial larger companies that are in financial difficulty to some degree.

Unknown Executive: I think you'll find if you look at our major competition, which you know some are public, you can see their results in private. Some of them took the approach many years ago that they were going to spend lots of money, take loans to do it, and scale by basically getting revenue below its cost. And there are substantial larger companies that are in financial difficulty to some degree. And as I said before, unless I tell you guys, but unless investors give money, they will have a challenge in the next 18 months to survive.

Speaker Change: I think you find, if you look at our major competition,

Speaker Change: What you know, some are public. You can see their results in private.

Speaker Change: Some of them took the approach many years ago, but they were going to spend lots of money, take loans to do it, and scale by basically getting revenue below its cost.

Speaker Change: and there are substantial larger companies that are in financial difficulty to some degree. And as I said before, unless, I say you guys, but unless investors give them money,

Stephen Sadler: And as I said before, unless I say you guys, but unless investors give the money, they will have a challenge in the next 18 months to survive. So the market is quite good, even for larger contact center companies. And so we see the capital allocation is quite positive.

Speaker Change: they will have a challenge in the next 18 months to survive. So the market's quite good, even for larger contact center companies. And so we see the capital allocation is quite positive. And again, as long as...

Unknown Executive: So the market's quite good, even for larger contact center companies. And so we see the capital allocation is quite positive. And again, as long as taxes go up, it's just another issue. But with debt and higher interest rates, again, you can look at our competition and see how they're doing compared to us. So we do see a positive future from the acquisition side.

Stephen Sadler: And again, as long as the taxes go off, it's just another issue. But with debt and higher interest rates, again, you can look up our competition and see how they're doing compared to us. So we do see a positive future from the acquisition side.

Speaker Change: If taxes go up, it's just another issue, but with debt and higher interest rates, again, you can look up our competition and see how they're doing compared to us. So we do see a positive future from the acquisition side.

Unknown Executive: Just a quick follow-up on that; most of your acquisitions have been fairly small; would you consider larger acquisitions, or are they still not quite meeting your return metric? We would, of course, if they were

Unknown Executive: Isn't it a quick follow-up on that? The most of your acquisitions have been fairly small.

Speaker Change: Just a quick follow up on that. Most of your acquisitions have been fairly small. Would you consider larger acquisitions, are they still not quite meeting your return metrics?

Stephen Sadler: Would you consider larger acquisitions, or are they still not quite meeting your return metrics? We would, of course, if they, if our return metrics, the problem with some of the larger ones, they have huge debt. And so you do one; you don't do more because we'd have to somehow sort out their huge debt. So we figure just letting them run a little bit longer.

Unknown Executive: We would, of course, if they gave us our return metrics. The problem with some of the larger ones is that they have huge debts. And so you do one, you don't do more, because we'd have to somehow sort out their huge debt. So we figured just letting them run a little bit longer.

Speaker Change: We would, of course, if they give our return metrics. The problem with some of the larger ones, they have huge debt.

Speaker Change: And so you do one, you don't do more, because we'd have to

Speaker Change: somehow sort out their huge debt. So we figured just letting them run a little bit longer,

Stephen Sadler: You see the couple; we're buying asset deals now, you've noticed. That's because the companies are having some financial difficulty. And even when we bought the media side asset deal, they didn't survive for six weeks afterwards with our money, with which we paid them. So it's an interesting environment, but a challenge in one today. In some ways, it's difficult to get rapid sales growth. Some companies in that industry, especially context center, have gone that way. And most of them are hurting by doing it.

Unknown Executive: You've seen a couple; we're buying asset deals now, you've noticed; that's because the companies are having some financial difficulties. And even when we bought the media site asset deal, they didn't survive for six weeks afterwards with our money, which we paid them. So it's an interesting environment, but a challenging one today. In some ways, it's difficult to achieve rapid sales growth. Some companies in that industry, especially contact center companies, have gone that way, and most of them are hurting by doing it.

Speaker Change: and John Aucott. Thank you. Thank you.

Speaker Change: You've seen a couple, we're buying asset deals now, you've noticed.

John Aucott: That's because the companies are having some financial difficulty. And even when we bought the media site asset deal, they didn't survive for six weeks afterwards.

Speaker Change: with our money, which we paid them. So it's an interesting environment, but a challenging one today. In some ways, it's difficult to get rapid sales growth.

Speaker Change: Some companies in that industry, especially contact center, have gone that way, and most of them are hurting by doing it. We've taken a more prudent approach.

Unknown Executive: We've taken a more prudent approach, don't have the same sales growth, but at least our sales are profitable, not just sales for making top line revenue that investors can be fooled by sometimes. Thanks for taking the call.

Stephen Sadler: We've taken a more prudent approach. Don't have the same sales growth, but at least our sales are profitable. Not just sales from making top line revenue that investors can be fooled by sometimes.

Speaker Change: don't have the same sales growth, but at least our sales are profitable, not just sales from making top line revenue that investors can be fooled by sometimes.

Unknown Executive: Thanks for taking the questions. Thank you. And once again, if you would like to ask a question, simply press a star followed by the number one on your telephone keypad.

Speaker Change: Thanks for taking the questions.

Operator: Thank you. And once again, if you would like to ask a question, simply press the star followed by the number one on your telephone keypad. I'm not taking any further questions at this time. I would like to turn it back to Stephen Sadler for closing remarks.

Speaker Change: Thank you. And once again, if you would like to ask a question, simply press a store, followed by the number one on your telephone keypad.

Unknown Executive: I'm showing no further questions at this time.

Stephen Sadler: I would like to turn it back to Stephen Sadler for closing remarks. Well, everyone, thank you for attending the call. Enghouse continues to be a strong financial company with growth, no financial deaths, and opportunities in a changing business environment.

Speaker Change: I'm showing no further questions at this time. I would like to turn it back to Stephen Sandler for closing remarks.

Stephen J. Sadler: Well, everyone, thank you for attending the call. Enghouse continues to be a strong financial company with growth, no financial debt, and opportunities in a changing business environment. Look forward to seeing you on the next call.

Stephen J. Sadler: Well, everyone, thank you for attending the call. Ench House continues to be a strong financial company with growth, no financial death, and opportunities in a changing business environment. Look forward to seeing you on the next call.

Stephen Sadler: Look forward to seeing you on the next call. Thank you.

Operator: Thank you. And, ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.

Unknown Executive: Ladies and gentlemen, this concludes today's conference call. Thank you for participating.

Stephen J. Sadler: Thank you. And ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.