Q1 2025 American Software Inc Earnings Call

They can move and pivot and leverage the existing network more effectively that's what's been really taken shape and getting traction with our clients. So we're very excited about that that was the original design and strategy.

Helping us win a broader portfolio of products projects.

Where we can incorporate that in and we have a competitive advantage as well as just an add on to existing clients and helping them more effectively manage our supply chain, so very exciting to see.

The fruits of our efforts in the original strategy that we laid out come to bear.

Speaker Change: Great great good to hear that that's coming around maybe as a follow up question would be.

Speaker Change: I guess with the.

Speaker Change: Engagement.

Speaker Change: On the cloud migration with existing customers.

Speaker Change: And maybe combined with.

Speaker Change: It sounds like we're waiting to see a little bit how.

Speaker Change: Trade dynamics shape up in the back half of the year and then some other macro things.

Speaker Change: Suppose the rates stay relatively high and.

There is still concerns on non macro the back half of the year do you expect.

Speaker Change: That we might see customers.

Speaker Change: Sort of hit.

Speaker Change: Hit the brakes and not move forward on migration project and.

Speaker Change: CA sort of greater drop off in maintenance in that scenario if kind of the features are now frozen on the premise product or should we see that it may be a risk or a scenario that could play out if if the pipeline of conversion doesn't play out at the attended or as quickly as intended.

Speaker Change: Yes.

Speaker Change: Actually seeing the economic anxiety I'll call. It is probably a stronger impact on new client opportunities.

Speaker Change: And bigger transformative projects then than we see on these transformational projects, where we're moving moving them from self managed to to us providing the latest in the cloud for them.

Speaker Change: We're also seeing a combination of things the moves that we've made it also.

Speaker Change: Having more and more clients experienced the challenges associated with keeping their environment is protected.

Speaker Change: From intrusion and from.

Cyber cyber.

Speaker Change: Cyber security efforts, becoming much more dominant much more complicated more intrusions around their it environment. So there is a there is a pent up demand to move over but the reality is it's still a project is not just something you pick up and say, let's go do that tomorrow. So it's required this budgeting cycle.

Speaker Change: So we anticipate that the cloud conversions will not be nearly as impacted by the economic conditions because of the other influencing factors and then it will become a more prominent part of our.

Speaker Change: Delivery model as well as our financial results as we go forward into the back half of our fiscal year and on into fiscal 2026. So we're very excited about that move being very well received by our clients oftentimes a good bit of a discussion.

Speaker Change: But and then we're seeing more and more clients. These days that are just saying they've got a.

Speaker Change: Our migration strategy already planned for a comprehensive suite of their applications and we're part of that.

Speaker Change: We don't anticipate at an accelerated rate of terminations or cancellations of maintenance.

Speaker Change: Because of the nature of our applications that would be very rare for a client to use the applications without any kind of support so.

Speaker Change: They are either going to stay with us on support transition with us or in some cases, maybe they'll get frustrated and move off but when they move off theyre going to.

Speaker Change: Next application they find is going to be in the cloud too so.

Speaker Change: They might be frustrated that we're asking them to move but.

Speaker Change: There are other movie is going to be to the cloud. So there's not a lot of good options that you'd say I want to stay in my my old operating mode.

Speaker Change: Great. Thank you.

Speaker Change: Well move next to Zach Cummins Your line is open.

Speaker Change: Hi, good afternoon, Allan and Vince Thanks for taking my questions.

Zach Cummins: Alan I was curious if you could give an update on garment I guess now been rebranded.

Our rebranded as demand AI plus.

Zach Cummins: If I recall from the last earnings call I think you are and maybe the later stages of some of these pilot programs may be transitioning into longer term contracts. So just curious if you could give any sort of update on the traction with those conversions and maybe the driving interest from new customers.

Zach Cummins: Yes.

Speaker Change: Thank you for joining US you did you nailed it.

Speaker Change: The company was Garver's, we've branded the product the demand forecasting product to be D. AI plus demand AI plus.

Speaker Change: So that is when we talk about demand plus being prominent with our new clients and existing clients. We actually have a combination. It is it is the only forecasting capability, we make available in the marketplace today.

Speaker Change: So if a client is going to get forecasting from us thats, what theyre getting.

Speaker Change: What we've what we acquired from the <unk> acquisition CDI plus is the only thing out there we.

Speaker Change: We have a combination the folks that are moving from their self managed environment over to our latest capabilities, they're migrating to demand AI plus.

Speaker Change: So that's an existing client migration, we have clients who are already in the cloud being managed by US who are upgrading the AI plus to get the advanced capabilities and improved forecasting accuracy associated with it.

Speaker Change: Certainly out there and then related to the other part of the question was how are we doing on.

Speaker Change: <unk> down the clients that came over from the acquisition. They were really short term clients some of them still in pilot some of them in long term implementations, but they were going month to month.

Speaker Change: Begun that locked down getting them into.

Speaker Change: A longer term contract structure.

Speaker Change: So that's ongoing and we're making some good progress there some of those are a little bigger in environments as well and we've been working with those clients to get them in the budget. So that they would have the funds available to commit to a longer term contract in the new calendar year. So good progress all the way around the team is fully adopted it well embraced.

The R&D efforts of got it embedded directly into our platform. So it seamless just like all the rest of the applications.

Speaker Change: Understood. That's helpful and my one follow up question is really on the competitive environment with Manhattan releasing.

Speaker Change: Their own supply chain planning product. This fall just just curious if you've seen any.

Speaker Change: Evolution.

Speaker Change: In the marketplace.

Speaker Change: We go up against.

Speaker Change: Well related to that one specifically it seems like it's a press release, so far so we've not had any any awareness or no new no new involvement of them from a competitive landscape.

Speaker Change: Good company, so I don't want to just pure disrespectful of them in any way, but <unk>.

Speaker Change: Getting into the supply chain planning space being prominent in the supply chain planning space is not an easy game. So we will we will see how that plays out.

Speaker Change: Other than that.

Speaker Change: Our competitive landscape really hasnt changed.

Speaker Change: Evolved at all.

Speaker Change: We still see the resistance the number one competitor in our segments, which are predominantly the consumer goods companies as dominates the space there.

Speaker Change: To the extent that they are there.

Speaker Change: The CIO and the CFO.

Speaker Change: Want to give them as many trials as they possibly can to deliver but in complex supply chains long lead times.

Speaker Change: Just not very effective so we are quite.

Speaker Change: We have good success there the second most prominent in the consumer goods space from an ERP standpoint is Microsoft and they really don't have much to offer in this area at all so so we've got good competition from that standpoint, when they're there.

Speaker Change: And then just the traditional folks I think.

Speaker Change: Oh nine is actually faded a bit we arent seeing them nearly as much and can access a little bit when you get closer to the some of the segments, where we crossover.

But long lead time complicated supply chain is not so much and then blue yonder seems to be a distracted more.

Speaker Change: Around their supply chain execution capabilities, but we still see them.

Quite frequently.

Speaker Change: But that seems to be more prominent than their portfolio as far as we can tell.

So a mixed mixed environment, but really nothing changed over the last six to nine months or a year probably.

Speaker Change: Understood. That's very helpful context, I appreciate you taking my questions and best of luck with the rest of the quarter.

Speaker Change: Thank you thank you for joining us.

Speaker Change: Yeah. It does appear that there are no further questions at this time.

Speaker Change: Alright, well. Thank you so much for helping US today. Thank you all all of you for joining us on the conference call. Today. We appreciate your time and attention and we look forward to speaking to you again in the near future have a good afternoon.

Speaker Change: Yes.

This does conclude today's program. Thank you for your participation you may disconnect at anytime and have a wonderful afternoon.

Speaker Change: [music].

Speaker Change: Yeah.

Speaker Change: Yes.

Speaker Change: Hum.

Speaker Change: Okay.