American Software, Inc.

Good day, everyone, and welcome to today's first quarter fiscal year 23 preliminary 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. Please note, today's 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 Vince Klingas, CFO of American Software.

Thank you, Chloe. And good afternoon, everyone, and welcome to American Software's first quarter of fiscal 2023 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 will review the numbers. But first, our safe harbor statements. 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 in, contemplated by, or underlying the forward-looking statements. There are a number of factors that could cause actual results to differ materially from those anticipated by 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 can 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 our opening remarks.

Thank you, Vince. I'm pleased to report that our first quarter results were in line with expectations. As such, we're on track to meet the guidance we provided on the last call. We achieved 8% year-over-year revenue growth in our supply chain management segment during the quiet summer months where we traditionally see downward pressure on consulting services. Our subscription revenue growth remains solid at 23%, and we are especially encouraged by the continued growth in our pipeline and the trust our clients place in us to help them stay on top of emerging technology trends. Our strong top line performance was accompanied with a significant expansion in our adjusted EBITDA margin, which increased to 14% from 13% in the prior year. We anticipate continued revenue growth in fiscal year 23 with the continued growth of the 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're continuing to expand our team across all aspects of the business and are anticipating that we can staff our expansion needs on a timely basis. Although the lingering impact of the pandemic, continuation of major world events, inflationary pressures, and now the signs of recession continue to stir some business uncertainty, we have not seen any slowdown in pipeline expansion. However, we're mindful of the potential for an extension in close rates, so we're working hard to keep projects on track and to get contracts signed as soon as possible. Staffing shortages in the supply chain and IT organizations continue to be the primary impact on the timing of contract approvals as clients grapple with how to implement projects while struggling with day-to-day operations. However, we've not seen any material change in this impact relative to the last few quarters. Overall, our pipeline continues to increase, driven by the needs for clients to holistically manage their supply chains in a sustainable and economically resilient way, and the need for rapid and informed decision making that has never been more in demand as our clients are facing another period of disruptions and uncertainty. We remain confident that between a larger opportunity set and improved execution, we're poised for a strong year ahead. Overall, we're pleased to see the continued growth in our recurring revenue stream of cloud services and maintenance, which represents approximately 67% of total revenues in fiscal Q1. With the increase in new subscription contracts and the continued stability of our cloud and on-prem client community, we expect to see the recurring revenue as a percent of total revenue continue to rise over time. During the first quarter, we announced our most recent acquisition. so I want to offer a brief update on our progress there. The team that came over from Starboard has been fantastic to work with. The client community has embraced our strategy, and we did not miss a beat on the opportunities that were in the pipeline we inherited. I would say that we're ahead of plan in the integration work and are accelerating the pipeline for network design optimization opportunities faster than we had anticipated. We closed one standalone opportunity in July with an e-commerce logistics and fulfillment company to help optimize their logistics operations. We also successfully attached the network design optimization solution to one of the Logility projects that we closed prior to the end of the quarter. This win was with a multi-billion dollar automotive services and parts company that is growing rapidly through acquisition. As soon as we presented our strategy for blending network design as an integral part of the planning suite, they were immediately on board. We will leverage the network design optimization solution to give them early insights on how best to integrate the acquired company's logistics operations, which in turn will provide insights on how to streamline the design of the planning solution. After Go Live, we'll have an integrated solution to manage an iterative design and planning process. We're on track with building and executing on the pipeline for network design optimization and see this acquisition to be everything we expected, if not more, in regards to a productive expansion of our footprint. The rapid success on this one clearly leaves us with the capacity to pursue other acquisitions with an objective to find at least one more with a strategic fit to our portfolio before the end of our fiscal year. As I mentioned in my opening comments, Based on our Q1 results, we're confident in our performance will be in line with the guidance we provided back in June, which is for total revenues to be between $132.5 million and $135 million and adjusted EBITDA to come in between $16 and $18 million. As the traditional busy fall season comes into a full effect and with our continued expansion of recurring revenue as we close in on the 70% milestone, We will be in a better position to provide any revisions to this guidance in our November report. In summary, we're pleased with the first quarter results and expect to extend the performance improvements of our financial model during the remainder of this fiscal year. 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 while we In parallel, 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.