American Software, Inc.

Good day, everyone, and welcome to today's fourth quarter and fiscal year 22 financial results. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session. You may register to ask a question by pressing the star and 1 on your touch-tone telephone. Please note this call may be recorded, and I will be standing by should you need any assistance. It is now my pleasure to turn the conference over to Vincent Clingney, Chief Financial Officer. Please go ahead.

Thank you, Ashton. And good afternoon, everyone, and welcome to American Software's fourth quarter fiscal 22 earnings conference call. On the call with me is Alan Dow, President and CEO of American Software. Alan will provide some opening remarks, and then I'll review the numbers. But first, our safe harbor statement. This conference call may contain forward-looking statements. including statements regarding, among other things, our business strategy and growth strategy. Any such forward-looking statements speak only as of this date. These forward-looking statements are based largely on our expectations and are subject to a number of risks and uncertainties, some of which cannot be predicted or quantified and are beyond our control. Future developments and actual results could differ materially from those set forth and contemplated by or underlying the forward-looking statements. There are a number of factors that could cause actual results that differ materially from those anticipated on statements made on this call. Such factors include but are not limited to changes and uncertainty in general economic conditions, the growth rate of the market for our products and services, the timely availability and market acceptance of these products and services, the effect of competitive products and pricing and other competitive pressures, and the irregular and unpredictable pattern of revenues. In light of these risks and uncertainties, there could be no assurance that the forward-looking information will prove to be accurate. At this time, I'd like to turn the call over to Alan for opening remarks.

Thank you, Vince. I'm pleased to report that during the fourth quarter, we again achieved strong double-digit revenue growth in our supply chain management segment and for the company as a whole. This was the third consecutive quarter of double-digit revenue growth which was driven by the double revenue growth in our supply chain management segment in each quarter of fiscal 2022. Our strong top line performance was accompanied by a significant expansion in our adjusted EBITDA margin as we gained efficiency from the cloud growth and achieved very high utilization rates across all of our services segments. We had not anticipated the accelerated level of license revenue in the fourth quarter, And anomaly in our recent history, but are pleased that our clients are continuing to invest in their supply chains by extending their partnership with us, regardless of the licensing model that best suits their current needs and skills. We anticipate continued revenue growth in fiscal year 23 with the continued growth in our cloud business and a healthy backlog of project work. In spite of a very competitive labor market, especially in the supply chain and technical space, we are continuing to expand our team across all aspects of the business. We plan to repeat this pace of hiring to fulfill the needs of the expected growth in the years ahead. Between our growth investments and inflationary pressures from which none of us are immune, EBITDA expansion will be tempered in the quarter and year ahead as we continue to invest for employee retention, expanding the team, and a return of in-person client meetings and marketing events demanding a higher level of travel. The lingering impact of the pandemic, continuation of major world events, inflationary pressures, and chatter of a potential recession have extended the fragmented working environments, business uncertainty, and the frenzied activities of our clients as they address their short-term supply chain issues. Staffing shortages in the supply chain and IT organizations continue to impact the timing of contract approvals as clients grapple with how to implement a project while struggling with day-to-day operations. However, we continue to see a steady improvement in our pipeline conversion. Our strong close rate in the fourth quarter has pushed our project backlog to unprecedented levels and extended our RPO. In spite of some progress due to our prescriptive approach and staff augmentation efforts, we are mindful that new disruptions, labor challenges, and the potential of recessionary pressures may cause some rockiness in project timing in the quarters ahead. Overall, our pipeline continues to increase, driven by the need for our clients to holistically manage their supply chains in a sustainable and economically resilient way. The need for rapid decision-making has never been more in demand, so we remain confident that between a larger opportunity set and improved execution, we are poised for a strong year ahead. Our team is focused on serving existing clients, delivering on our implementation commitments, and bringing new companies into our client community more efficiently than ever before. The continued increase in our services backlog We are relying more and more on SI partners to assist in the delivery, which puts a little downward pressure on the professional services revenue growth, but increases our reach and sphere of influence. The summer months are always a little choppier for billable hours, but in the longer view, we still anticipate continued high utilization rates across all services teams which will deliver year-over-year growth in consistently strong margins in the supply chain consulting services business in the year ahead. During the fourth quarter, we welcomed four new clients and completed subscription or license fee transactions in nine countries, reflecting our strong global presence. We also are pleased to see the continued growth in our recurring revenue stream of cloud services and maintenance, which represented approximately 62% of total revenues in fiscal 2022. This was driven by the 26% increase in cloud services ACV we saw in the fourth quarter when compared to last year's fourth quarter. With the increase in new subscription contracts and the continued stability of our cloud and on-prem client community, we expect to see recurring revenue as a percent of total revenue continue to rise. With the current level of recurring revenue, we feel the timing is right to provide guidance on our financial expectations in the year ahead. As we look forward, we anticipate total revenues of $132.5 million to $135 million, including total recurring revenues of $86.5 million to $89 million. With the aforementioned revenue and our investments in future growth, We anticipate adjusted EBITDA to come in between $16 and $18 million. Moving forward, we plan to update our annual guidance each quarter to provide the investment community with a clear view into our progress against these goals. As our recurring revenue guidance incorporates our assumptions for cloud service ACV and as our primary focus for long-term growth perspective, we will no longer be reporting our cloud services ACV metric. which tends to be lumpy on a quarterly basis, simply based on the variance of a few days or weeks timing of contract execution, which can skew the perception of how our business is performing. To be clear, our outlook for fiscal 2023 does assume that we will add more net new ACV than we did in fiscal 2022. In summary, we're pleased with the fourth quarter and year-end results, and expect to extend the performance improvements of our financial model in the fiscal year ahead. We remain intently focused on executing against our growing pipeline and look forward to reporting our progress next quarter. Our mission of making our clients more successful year after year is paying off in client retention and expansion as we introduce innovative capabilities for managing sustainable supply chains that attract new clients to our community of partners. At this time, I'll turn the call over to Vince, who will provide the details on our financial results.