Q2 2025 Enghouse Systems Ltd Earnings Call

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Speaker Change: Good morning, ladies and gentlemen, thank you for standing by welcome to the edge has it skewed do 2025 conference call at this time all lines right now listen only mode. Following the presentation. We will conduct a question and answer session. If at any time. During this call you are quite you need assistance. Please press star zero.

Unknown Executive: Good morning, ladies and gentlemen. Thank you for standing by.

Unknown Executive: Welcome to the EngHouse's Q2 2025 conference call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the option.

Speaker Change: Later this call is being recorded today Friday June 620, 25, I would now like to turn the conference over to Mr. Stephen Sadler, Chairman and CEO. Mr. Sadler. Please go ahead.

Unknown Executive: This call is being recorded today, Friday, June 6, 2025.

Stephen Sadler: I would now like to turn the conference over to Mr. Stephen Sadler, Chairman and CEO. Mr. Sadler? Good morning.

Speaker Change: Martin, but I'm here today, with Rob Abbott, Chief Financial Officer, and Todd May VP legal counsel before we begin I was talk read our forward disclaimer.

Stephen Sadler: I'm here today with Rob Medved, Chief Financial Officer and Todd May, VP, Legal Counsel.

Todd May: Before we begin, I will have Todd read our forward disclaimer. Certain statements made may be forward-looking. By their nature, such forward-looking statements are subject to various risks and uncertainties, including those in NHSN's continuous disclosure problem, such as its AIF, which could cause the company's actual results and experience to differ materially from anticipated results or other expectations.

Speaker Change: Certain statements made may be forward looking by their nature such forward looking statements are subject to various risks and uncertainties, including those and it shows this continuous disclosure filings such as its area, which could cause the company's actual results and experiences to differ materially from anticipated results or other expectations undue reliance should not be placed on forward looking information and the company has no obligations.

Todd May: Under-reliance should not be placed on forward-looking information, and the company has no obligation to update or revise any forward-looking information, whether as a result of new information, future events, or otherwise.

Speaker Change: To update or revise any forward looking information, whether as a result of new information future events or otherwise.

Todd May: Thanks, Todd.

Robert Medved: Rob will now give an overview of the financial and business results. Thank you, Steve. Good morning, everyone, and thanks for joining us.

Rob: Rob will now give an overview of the financial and business results.

Speaker Change: Thank you Steve.

Speaker Change: Everyone and thanks for joining us.

Robert Medved: As we present our second quarter results, it's important to acknowledge the broader environment in which we're operating. The global economy remains volatile, shaped by geopolitical instability, shifting trade policies and persistent inflationary pressures. These factors are contributing to a more cautious investment climate, where customers are taking longer to make purchasing decisions. Foreign exchange volatility has also intensified with significant movements in the U.S. dollar, euro, and pound, impacting both revenue and expenses.

Speaker Change: We present, our second quarter results its important to acknowledge the broader environment in which we're operating the global economy remains volatile shaped by geopolitical instability shifting trade policies and persistent inflationary pressures. These factors are contributing to a more cautious investment climate, where customers are taking longer to make purchasing decision.

Speaker Change: <unk>.

Speaker Change: Foreign exchange volatility is also intensified with significant movements in the U S dollar euro and pound impacting both revenue and expenses. Despite these headwinds we remain focused on what we can control disciplined execution operational efficiency and long term value creation.

Robert Medved: Despite these headwinds, we remained focused on what we can control, disciplined execution, operational efficiency, and long-term value creation. Revenue for the quarter was $124.8 million, a modest decline of 0.8% year-over-year. On a year-to-date basis, revenue increased 1% to $248.8 million for the six-month period. Recurring revenue, which includes staff and maintenance services, increased to $86.2 million, representing 69.1% of total revenue. This is up from 67.5% in the same quarter last year, and underscores our strategic focus on increasing predictable long-term revenue streams. Adjusted EBITDA was $28.6 million, with a margin of 22.9%, compared to $35.7 million and a 28.4% margin in Q2 2024.

Speaker Change: Revenue for the quarter was $124 8 million a modest decline of 8% year over year on a year to date basis revenue increased 1% to $248 8 million for the six month period.

Speaker Change: Recurring revenue, which includes SaaS and maintenance services increased to $86 2 million, representing 61% of total revenue.

Speaker Change: This is up from 67, 5% in the same quarter last year and underscores our strategic focus on increasing predictable long term revenue streams.

Speaker Change: Adjusted EBITDA was $28 6 million with a margin of 22, 9% compared to $35 7 million and 28, 4% margin in Q2 2024 year to date adjusted EBITDA was $61 7 million to $70 4 million in the prior year.

Robert Medved: Year to date Adjusted EBITDA was $61.7 million, compared to $70.4 million in the prior year. Net income for the quarter was $13.5 million, or $0.24 per diluted share, compared to $20 million, or $0.36 per diluted share last year.

Speaker Change: Net income for the quarter was $13 5 million or <unk> 24 cents per diluted share compared to 20 million or <unk> 46 cents per diluted share last year. The decline reflects increased operating costs as a result of incremental services cost attributable to the shift towards SaaS revenue.

Robert Medved: The decline reflects increased operating costs as a result of incremental services costs attributable to the shift towards SAS revenue, overlap of costs related to recent acquisitions as they are completed and integrated, as well as special charges of $1.4 million. We generated $25.5 million in net cash provided by operating activities, excluding changes in working capital and income taxes paid this quarter. We ended the quarter with $263.5 million in cash, cash equivalents, and short term investments, and we continue to operate with no external debt.

Speaker Change: Overlap of cost related to recent acquisitions as they are completed and integrated as well as special charges of $1 4 million.

Speaker Change: We generated $25 5 million in net cash provided by operating activities, excluding changes in working capital and income taxes paid this quarter. We ended the quarter with 263 5 million in cash cash equivalents and short term investments and we continue to operate with no external debt.

Robert Medved: During the quarter, we returned $14.3 million to shareholders through dividends and invested $26.8 million in acquisitions. Our strong balance sheet provides the flexibility to continue investing in innovation and growth, even in uncertain times.

Speaker Change: During the quarter, we returned $14 3 million to shareholders through dividends and invested $26 8 million in acquisitions.

Speaker Change: Our strong balance sheet provides the flexibility to continue investing in innovation and growth even in uncertain times acquisitions.

Robert Medved: Acquisitions remain a core pillar of our growth strategy. In Q2, we purchased and proceeded the integration of Mergento, a scalable mobility as a service platform. We also acquired Trafi, a Lithuania-based mobility as a service provider. These additions enhance our transportation portfolio within the asset management group and align with our broader mobility strategy. We continue to evaluate opportunities that align with our strategic direction and long-term vision. While we've seen some demand side hesitancy and delays in capital investment decisions, our global diversification and recurring revenue base provide a degree of insulation. We are actively optimizing costs and aligning resources to support margin expansion and long term growth.

Speaker Change: Acquisitions remain a core pillar of our growth strategy in Q2, we purchased and completed the integration of our gentle scalable mobility as a service platform. We also acquired traffic almost way near based mobility as a service provider. These additions enhance our transportation portfolio within the asset management group.

Speaker Change: And align with our broader mobility strategy, we continue to evaluate opportunities that align with our strategic direction and long term vision.

Speaker Change: While we've seen some demand sides hesitancy and delays in capital investment decisions, our global diversification and recurring revenue base provides a degree of insulation, we are actively optimizing costs and aligning resources to support margin expansion and long term growth.

Robert Medved: Looking ahead, we remain focused on execution. We believe that periods of uncertainty often create opportunities for well capitalized disciplined companies, like Enghouse, to strengthen their market position.

Speaker Change: Looking ahead, we remain focused on execution, we believe that periods of uncertainty often create opportunities for well capitalized disciplined companies like ancho strengthen their market position.

Robert Medved: Yesterday, our Board of Directors approved a quarterly dividend of $0.30 per common share, payable on August 29, 2025, to shareholders of record as of August 15, 2025.

Speaker Change: Yesterday, our board of directors approved a quarterly dividend of <unk> 30 per common share payable on August 29, 2025 to shareholders of record as of August 15th 2025.

Robert Medved: In closing, while the macroeconomic environment remains complex, our strategy is clear. We are committed to delivering long-term value through operational discipline, strategic acquisitions, and a focus on recurring revenue. Thank you for your continued support.

Speaker Change: In closing, while the macroeconomic environment remains complex. Our strategy is clear we are committed to delivering long term value through operational discipline strategic acquisitions and our focus on recurring revenue. Thank.

Speaker Change: Thank you for your continued support.

Stephen Sadler: I'll now turn the call over to Mr. Sadler. Thanks, Rob. We continue to refine our new business unit structure, working as a team approach to challenge the marketplace. This, as you remember from last quarter, we just started early January. In the AMG segment, 4G to 5G continues, but at a pace that is slower than expected. AI continues to be promoted in discussions, but there's great difficulty in monetizing its benefits. Customers seem to be taking a wait-and-see approach.

Mr. Sadler: Now I'll turn the call over to Mr. Sadler.

Sadler: Thanks, Ralph we continue to refine our new business unit structure working as a team approach to challenge. The marketplace. This is you remember from last quarter. We just started early January.

Sadler: The AMG segment for GE to fight continues but at a pace that is slower than expected AI continues to be promoted to discussions.

Sadler: It was great difficulty of monetizing its benefits customers seem to be taking a wait and see approach.

Stephen Sadler: With respect to acquisitions, partway through the quarter, as Rob mentioned, we acquired Bargento, and at the end of the quarter, acquired Trafee. They are being integrated into our AMG segment in transportation. For the quarter, they added about $1.5 million of revenue and operated basically on a break-even basis. We expect both acquisitions to add further to revenue and operating income next quarter.

Speaker Change: With respect to acquisitions partway through the quarter as Rob mentioned, we acquired by gentle and at the end of the quarter acquired traffic they are being integrated into our AMG segment and transportation.

Speaker Change: For the quarter. They added about $1 5 billion of revenue and operating basically on a breakeven basis, we expect both acquisitions to add further to revenue and operating income next quarter.

Stephen Sadler: We continue to see substantial capital allocation opportunities in our industry sectors, but there's a lot of uncertainty delaying completion of opportunities. As Rob mentioned, Enghouse is financially strong, generating positive cash flow and having a substantial cash balance to implement changes needed in the business and continue our capital deployment without the need for external financing.

Speaker Change: <unk> continued to see substantial capital allocation opportunities in our industry sectors, but theres a lot of uncertainty delaying completion of opportunities.

Speaker Change: As Ron mentioned and Jos is financially strong and generating positive cash flow and having a substantial cash balance to implement changes needed in the business and continue our capital deployment without the need for external financing I would now like to open the call for questions.

Unknown Executive: I would now like to open the call for questions. Ladies and gentlemen, we will now begin the question and answer session. To ask a question, you may press star followed by the number 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, you may press star followed by the number 1 on your telephone keypad. Once again, please press star 1 to ask...

Speaker Change: And ladies and gentlemen, we will now begin the question and answer session to ask a question you May press star followed by the number one I'll go to telephone keypad, if youre using a speakerphone. Please pick up your handset before pressing anarchy do we draw. Your question you May Press Star followed by the number two once again.

Speaker Change: These press star one to ask a question.

Stephanie Price: And with that, our first question comes from the line at Stephanie Price with CIBC. I was hoping you could talk a little bit about You know, we are in sort of some tough markets, and again, as I said, the 4G to 5G, and you can see it from some of the telecom companies, they rarely lay off staff, and yet you've heard some layoffs recently by some of the largest ones, even in Canada. So again, that's slowing it down. It doesn't change what we do, because although it might be slow going to 4G to 5G, they're going to be a 6G, and they're all going to have to go to 5G and then to 6G.

Speaker Change: And with that our first question comes from the line up Stephanie price with CIBC. Please go ahead.

Stephanie Price: Steve I was hoping you could talk a little bit about the parts of the business that are seeing the biggest impact from that from the demand environment that you think you've kind of laid out there are you seeing it across the board or are there certain divisions that are seeing more of a headwind here.

Speaker Change: You know we already serve.

Speaker Change: Top markets again, as I said, the four <unk> to five <unk> as you can see it from some of the telecom companies are they are great.

Speaker Change: Rarely lay off staff again, <unk> heard some layoffs recently by some of the largest once even in Canada.

Speaker Change: So again, that's slowing it down it doesn't change what we do because although it might be still going to <unk> to <unk>.

Speaker Change: <unk>, they're all going to have to go to five <unk> to 60. So the future is still good but it's a little slow today.

Stephen Sadler: So the future is still good, but it's a little slow today. In the IMG group, which is Networks Contact Center, it seems to be a little bit on hold. If you notice, our competition generally doesn't make money. They generally have debt, so they're struggling a little bit, although they got some sales growth over the last couple of years, taking on what we would say is opportunities at a loss. We don't do that. But again, going forward, AI seems to slow things down. Everyone talks about it, but monetizing it, especially in enterprises, seems quite difficult. We're seeing the difficulty, and so is our competition, although we all do some of it in some form.

Speaker Change: In the IMG group, which is networks contact center, it seems to be a little bit on hold.

Speaker Change: You noticed our competition generally doesn't make money.

Speaker Change: Generally has debt solely theyre struggling a little bit below.

Speaker Change: They've got some sales growth over the last couple of years, taking on what we would say is opportunities at a loss we don't do that.

Speaker Change: But again going forward Aegon seems to slow things down everyone talks about it but monetize they get especially in enterprises seems quite difficult. We're seeing the difficulty and so is there competition alone. We all do some of it is sub four so again I think the I think it's there's generally.

Stephen Sadler: So again, I think there's generally struggles in those areas. In transportation, we're continuing to finish those major contracts. There's two that we announced three years ago, and we're still trying to finish them in Norway, and they should... Improve profitability as we go forward without the risk of trying for new revenue there. Revenue again, just from those two contracts will help going forward, but profitability will help even more. They actually turned profitable in the quarter after losing substantially last year, but not at our levels that we expect or that we should see from those as they put more up units on and they actually start using the system a little bit more.

Speaker Change: Struggles in those area.

Speaker Change: Inspiration all were continuing to finish those major contracts there is to that.

Speaker Change: We announced three years ago, we're still trying to finish up.

Speaker Change: In Norway and they should.

Speaker Change: Improved profitability as we go forward.

Speaker Change: Without the risk of strive for new revenue their revenue again, just from those two contracts will help going forward, but profitability will help even more.

Speaker Change: It actually turned profitable in the quarter after losing substantially the last year, but not at a level set.

Speaker Change: That we expect or that we should see from those as it goes as it put more.

Speaker Change: Units on and ask.

Speaker Change: Actually.

Speaker Change: Start using the system, a little bit more I will take a little bit of time, but we're right at the end of this now I mean in the next six months three months six months as they keep accepting more and more units going on that also without risk should improve profitability and maintain our revenue in this area. So again I think all of the areas. We're in.

Stephen Sadler: It'll take a little bit of time, but we're right at the end of this now. I mean, in the next six months, three months, six months as they keep accepting more and more units going on that also without risk should improve profitability and maintain our revenue in that area. So again, I think all areas we're in a little bit tough. So from the operations side, that's challenging, especially as we reorganize into business units. But it also should be a great opportunity to do capital allocation. It's a little slower now even there because they don't know what tariffs, et cetera, might do to many of the customers who might use a contact center.

Speaker Change: A little bit tough so from the.

Speaker Change: Operation side, that's challenging, especially as we reorganized the business units.

Speaker Change: But it also should be a great opportunity to capital allocation.

Stephen Sadler: It's a little slower and I'll leave it there because they don't know what.

Speaker Change: Tariffs et cetera might do to think of the customers who might use a contact center.

Unknown Executive: As an example, that's generally would be impacted, but pretty positive on going forward. And there's lots of opportunities at better pricing right now from an acquisition point of view. You mentioned you mentioned profitability there. Maybe you can talk a little bit about the in in the quarter outside of the transportation. division, you know, should we think about it as the mixed shift to SaaS? Like how, how do you think about margins moving back A little bit is revenue basically declined, okay, and because we restructured in early January, we're still going through a little bit of teething with that restructuring, so we probably didn't move as quickly as we usually do on taking out costs, but that will be solved in the next quarter.

Stephen Sadler: As an example, that's generally works would be impacted but pretty positive on going forward and there's lots of opportunities at better pricing right now from an acquisition point of view.

Speaker Change: Okay.

Speaker Change: You mentioned profitability there maybe you can talk a little bit about the puts and takes in the quarter and outside of the transportation Division.

Speaker Change: Think about it as the mix shift to SaaS like how how do you think about margins moving back up to kind of that historical range in the timeline there.

Speaker Change: Okay.

Speaker Change: Mix.

Unknown Executive: A little bit is revenue basically decline, okay, and because we restructured in early January.

Speaker Change: Going through a little bit of TV with that restructuring. So we probably didn't move as quickly as we usually do on taking out costs, but that will be solved in the next quarter.

Speaker Change: Okay. Thank you very much.

Unknown Executive: Okay.

Unknown Executive: Thank you very much.

Speaker Change: And your next question comes from the line of pulse fiber with RBC. Please go ahead.

Paul Treiber: And your next question comes from the line of Paul Treiber with RBCP. Thanks so much and good morning. There's a question on on life size. I think last quarter you called out there's some Transcripts provided by Transcription Outsourcing, LLC. Churn on Lifesize, but in general, there's still a little churn on video. That's partly came with the Lifesize acquisition, and partly we bought separately as well, a couple of businesses in that area. So there's still some churn in those two areas. Yes, still some churn, but not... If I was going back to my math, I would say the second derivative looks okay.

Speaker Change: Well, thanks, very much and good morning does that a question on on the Lifesize I think last quarter you called out there's some I guess anticipated churn that that occurred.

Speaker Change: As the revenue stabilized on a sequential basis or are you is there still some incremental.

Speaker Change: Sequential churn at Lifesize.

Speaker Change: Sure and on Lifesize.

Paul Treiber: Generally there is still a little ensure on video.

Speaker Change: And Thats, partly came with Lifesize acquisition, and partly we bought separately as well a couple of our businesses in that area. So theres still some churn in those two areas.

Speaker Change: Yes.

Speaker Change: But not.

Paul Treiber: So if five years going back to buybacks I would say the second derivative looks okay I'd like to turn just getting less and it's looking a little better going forward.

Paul Treiber: I like the churns getting less, and it's looking a little better going forward, but there's still a little bit of churn in that area, yes.

Speaker Change: But theres still a little bit of churn in that area yes.

Speaker Change: Okay. That's helpful and then turning to the the sauce business or the shift to size you did mention that the.

Paul Treiber: Okay, that's helpful. And then turning to the the SAS business or the shift to SAS, you did mention that it's a more challenging environment for new wins, but how does your pipeline look for SAS? Are you encouraged in terms of what you're, you know, hearing from customers in terms of their evaluation of SAS products? From our point of view, it's a little tougher right now, because as I said, you really have to use AI properly, as generally done on the SAS-type model. And so, again, a lot are holding back because there's lots of discussion. There's lots of enthusiasm on AI, but not much happening, actually, other than for the platform guys and for NVIDIA, of course.

Speaker Change: It's a more challenging environment for new wins, but how does your pipeline look for precise are you encouraged in terms of what you're hearing from customers.

Speaker Change: In terms of their evaluation of of SaaS products of the company.

Speaker Change: Yeah from our point of view.

Speaker Change: It's a little tougher right now because as I said.

Speaker Change: You really have to use it properly is generally done on the SaaS type model.

Speaker Change: And so again, the water holding back because theres lots of discussion there is lots of enthusiasm on AI, but not much happening actually other than.

Speaker Change: For the platform guys and for the video of course.

Stephen Sadler: But for enterprises, it really has to take a toll. People are still trying it out. There's a lot of caution around it, but people are hopeful that it will improve productivity in the future of agents. It won't eliminate agents. It'll improve their productivity. We're well-prepared to do that. There's always more work to do because we're in the first or second inning, but it depends where it goes. I would say... It's encouraging.

Speaker Change: But for enterprises really hasn't taken hold people are still trying it out there's a lot of caution around it but.

Speaker Change: People are hopeful that it will improve productivity of the future of agents will eliminate agents.

Speaker Change: Prove their productivity.

Speaker Change: We are well prepared to do that.

Speaker Change: There is always more work to do because we are the FERC secondary but.

Speaker Change: But it depends where it goes I would say.

Speaker Change: It is encouraging.

Speaker Change: What we see on the lifestyle side.

Stephen Sadler: What we see on the life-size side, part of life-size, we had a product called CX Exchange, which we will say is our new contact center, better front end, looks better, but with some third-party products in there that we have to eliminate because they hurt margin. That's virtually being done, we've been working on it for over a year, it'll be done in this next quarter as well. And so once that's improved, then we can be more aggressive in our selling. There's no sense going to sell something and telling people that they got to change it just after they bought it.

Speaker Change: Heart of Lifesize, we had a product called CX exchange, which is probably what we will say is our new contact center better front end it looks better.

Speaker Change: But we have some third party products in there that we have to eliminate because they.

Speaker Change: They are they hurt margin that's virtually be done we've been working on it for over a year it'll be done in this next quarter as well and so once SaaS improves then we can be more aggressive in our selling theres no sense going to sell something and tell people that they got to change. It just after they bought so again theres a little.

Stephen Sadler: So again, there's a little bit of things that are slowing us down a little bit, but we're doing the right things for the future.

Speaker Change: Bit of things that are slowing us down a little bit, but we're doing the right things for the future.

Speaker Change: And then just lastly for me just a question on capital allocation. The a E. You you've done a little bit of buybacks over the last year, but nothing this quarter you know whats your thoughts on.

Paul Treiber: And then just lastly for me, just a question on capital allocation, you've done a little bit of buybacks over the last year, but nothing this quarter, what's your thoughts on buybacks, share buybacks versus deploying capital on M&A. M&A actually is better. It expands the base, expands the company. Buying back our own shares to me is less risky, okay, if you can get it at the right price. So we have done some buyback. You can't do, well, unless you set it up, you can't do buybacks when you're in a blackout, which we've been in probably for the last six weeks or so.

Speaker Change: Buybacks share buybacks versus deploying capital on M&A at this point.

Speaker Change: M&A actually is better it expands the base expense the company buying back our own shares to be as less risky. Okay. If you can get it at the right price so.

Speaker Change: So we have done some buybacks you can do well unless you set it up you can't do buybacks. When you are in a blackout, which resilient probably for the last six weeks or so.

Stephen Sadler: I still like doing buybacks. And if the pricing is such that we believe it will give us a good return, we will do more buybacks. It's not something that we generally have favored in the last 15 or 20 years. But today, it looks like a reasonable use of our cash and we have a lot of cash. So we will look at it, but it's not to some, some companies do it to aggressively impact the stock price. We do it basically, because it makes sense and protects and gives us a good investment on that capital deployment.

Speaker Change: I still like doing buybacks.

Speaker Change: Yes.

Speaker Change: Pricing is such that we believe it will give us a good return we will do more buybacks is not something that we generally have favored.

Speaker Change: In the last 15 or 20 years.

Speaker Change: But today it looks like a reasonable use of our cash here, we have a lot of cash.

Speaker Change: So we will look at it but it's not too so.

Speaker Change: Some companies do it too aggressively.

Speaker Change: The stock price, we do it basically because it makes sense and protects it gives us a bit of investments on that capital deployment. So we will do some there yes.

Paul Treiber: So we will do some there. Yes.

Speaker Change: Okay. Thanks for taking the questions.

Unknown Executive: Thanks for taking the And once again, if you would like to ask a question, seem to press the star one on your telephone keypad.

Speaker Change: And once again, if you would like to ask a question you Press Star one on your telephone Keypad. Your next question comes from the line of really nowhere Nick with UBS. Please go ahead.

Bruno Wernick: Your next question comes from the line at Bruno Wernick with UBS.

Nick: Hi, good morning, everyone.

Bruno Wernick: Hi, good morning, everyone. If I could just help us to understand, please, how did effects impact both revenue and EBITDA, and how did that compare to your, to what you were So it affects a couple of ways. I must tell you, FX even confused me in this quarter. So that's maybe somebody says it's hard to do, but it's usually pretty hard to do. We had quite a large write-off on FX relating to the balance sheet, just under $4 million. And that's because right at the end of the quarter, the dollar dropped, the US. We held funds in US dollars, so you'll see there's an FX hit on the balance sheet of just under $4 million.

Nick: If I could just help us to understand please.

Nick: How did FX impact both revenue and EBITDA and how did that compare to your.

Nick: To what your expected thank you.

Speaker Change: So it is that's a couple of ways.

Speaker Change: Ill tell you FX, even confused VA this quarter.

Speaker Change: Yes.

Nick: Somebody SaaS are hard to do but it's usually pretty hard to do we had quite a large write off on FX related to the balance sheet just under four.

Speaker Change: <unk>.

Speaker Change: And thats because it right at the end of the quarter. The dollar drop the U S. We held funds that U S D.

Speaker Change: So you'll see theirs.

Speaker Change: FX hit on the balance sheet.

Speaker Change: 4 million just under $4 million from an income statement point of view, it's actually helped US. It revenue saw a revenue shift it was a little bit lower than what Sheldon there because FX was a help but it also helps the cost be high so the profit side. When you net the two there is an impact but I would say.

Robert Medved: From an income statement point of view, it actually helped us in revenue. So our revenue was a little bit lower than what's shown there because FX was a help, but it also helped the cost be higher. So the profit side, when you net the two, there is an impact, but I wouldn't say it's that significant. It's more of, it did help revenue, but it also helped cost.

Speaker Change: It's that significant.

Speaker Change:

Speaker Change: It's more of it did help revenue, but it also help cost.

Speaker Change: When I say help I mean negatively health cost so the impact of profitability was a little bit but it comes to EBITDA of course Thats based on the profit over the revenue with revenues a little higher and your costs didn't go down.

Speaker Change: And it's higher because of exchange it lowers EBITDA percentage, which again, we will fix because we didn't move on our cost fast enough as we should have in the quarter.

Speaker Change: Perfect Super helpful. Thank you.

Unknown Executive: Super helpful. Thank you.

Speaker Change: And we have no further questions at this time I would like to turn it back to Mr. Sadler for closing remarks.

Unknown Executive: And we have no further questions at this time.

Stephen Sadler: I would like to turn it back to Mr. Sadler for closing. Thank you everyone for attending the call. In this uncertain and challenging market, Enghouse is well positioned to operate profitably and acquire business assets to provide a good investment return on its capital deployment.

Speaker Change: One for attending the call and this uncertain and challenging market <unk> is well positioned to operate profitably and acquire business assets to provide a good investment return on this capital deployed.

Speaker Change: Great. Thank you presenters, ladies and gentlemen. This concludes today's conference call. Thank you all for joining you may now disconnect.

Unknown Executive: Thank you, presenters.

Unknown Executive: And ladies and gentlemen, this concludes today's conference call. Thank you all for joining. You may now

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].