Rimini Street, Inc.

Welcome to the Romini Street Earnings Call. My name is Darrell, and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. During the question-and-answer session, if you have a question, please press star, then 1 on your touch-tone phone. I will now turn the call over to Dean Polk. Dean, you may begin.

Thank you, Operator. I'd like to welcome everyone to Ramini Street's fourth quarter and fiscal year 2021 earnings conference call. On the call with me today is Seth Raven, our CEO, and Michael Parica, our CFO. Today we issued our earnings press release for the fourth quarter and fiscal year ended December 31st, 2021, a copy of which can be found on our website under investor relations. A reconciliation of GAAP to non-GAAP financial measures has been provided in the table following the financial statements in the press release. An explanation of these measures and why we believe they are meaningful is also included in the press release under the heading about non-GAAP financial measures and certain key metrics. As a reminder, Today's discussion will include forward-looking statements that reflect our current outlook. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from statements made today. We encourage you to review our most recent SEC filings, including our Form 10-K for fiscal year 2021, filed earlier today, for a discussion of risks that may affect our future results or stock price. Also, we recently asked Revell to complete an IR perception survey of investors and analysts. And we want to thank all of you who were able to participate and provide valuable feedback. We are evaluating the results and we'll be sure to take all the feedback into consideration as we move forward into our fifth year as a public company. Now, before taking questions, we'll begin with prepared remarks. With that, I'd like to turn the call over to Seth.

Thank you, Dean, and thank you, everyone, for joining us today. Q4 and fiscal year 2021 results. For the fourth quarter and full year 2021, we achieved a unique combination of record revenue exceeding our guidance, margin expansion, strong revenue retention, and cash flow generations. Also during 2021, we completed significant capital market transactions that materially reduced outstanding debt, our cost of capital, and potential equity dilution, and generated significant cash, ending 2021 with record cash of $119.6 billion. Taking these and additional factors into consideration, Today, we announced a stock repurchase plan of up to $15 million to further increase shareholder value. Michael will provide more of the plan details in his prepared remarks. From an operations perspective, we significantly expanded our full-year gross margin by delivering innovation that provides cost leverage and an even more extraordinary client experience. Innovations include proprietary, patented, and patent-pending AI and machine learning tools and technology. The implementation of just one AI tool alone, for example, has already led to an average 23% improvement in client case resolution time since its introduction in April 2021. Further differentiating ourselves with an extraordinary client experience We once again in the fourth quarter closed more than 9,700 support cases, delivered more than 31,000 tax, legal, and regulatory updates for 32 countries, and achieved an average client satisfaction rating on the company's support delivery and client onboarding services of 4.9 out of 5.0, where 5.0 is excellent. We believe our unique client experience and very high client satisfaction rating will drive increased loyalty, improved retention rates, and higher cross-sales. Since Rumini's inception in 2005, we have signed more than 4,600 clients, including over 180 Fortune 500 and Fortune Global 100 companies, and saved our clients more than $5 billion. We added a net of 56 and 362 new clients for the fourth quarter and full year 2021, respectively, a fiscal year-over-year increase of 14.6%. In addition, despite the global challenges with retention and recruitment in 2021 affecting many organizations, we were successful in expanding our global workforce by 16.9%, ending the year with over 1,660 employees. Pandemic and geopolitical impacts. So far, we believe we have navigated the pandemic well, and despite some continuing global risks and challenges related to existing and potential new COVID variants, we are taking steps globally to return to some office operations, attend select in-person marketing events, and increase our in-person sales activities. With respect to the Russian-Ukraine conflict, while clearly a terrible human tragedy and geopolitical event that could disrupt the global economy, Rumini Street does not have any offices or personnel in either Russia or Ukraine. We do have some clients headquartered in Russia and have multinational clients with operations in both Russia and Ukraine. We expect that we may experience some challenges serving Russian and Ukrainian clients or receiving timely payments from our Russian clients due to evolving sanction activity. Rimini Street's current annual revenue from Russian clients is not material. The full extent to which the pandemic and Russian-Ukraine conflict may affect our global business in 2022 and beyond will depend on numerous evolving factors that we cannot reliably predict at this time. demand and sales execution. Remini Street already serves many of the largest logos across different industries, and we believe our continued and growing focus on the specific needs of each industry will allow us to further penetrate the TAM in each industry with the breadth of our solutions portfolio. Accordingly, we continue to see a strong opportunity for our expanding portfolio of enterprise software support solutions and continue building and maturing our go-to-market capability to launch, sell, and deliver our full solutions portfolio to new and existing clients globally. Current sales opportunities and pipeline include more large deals at different stages of sales process than at any other time in company history. During the fourth quarter, we closed transactions with strategic plans local and global brands across diverse industries and geographies, and spanning the wider breadth of our solutions portfolio, including support, AMS, security, interoperability, monitoring, and professional services. Transactions were varying deal sizes, ranging up to our second largest sales deal in company history. We also continue to see growing momentum in cross sales through existing clients, where we believe at this time there's over $1 billion in annual white space sales opportunity. I shared with you during our last earnings call that more than half of our sellers and many within sales management have less than one year of experience in their remaining street roles. I'm pleased to note that we are seeing improved sales productivity. The close rates for the fourth quarter exceeded the close rates for the prior year fourth quarter, and we expect this trend to continue. In addition, we are seeing an increasing revenue growth rate in the U.S., where we have focused on building out feeder and regional sales leadership and capabilities. Client case studies. To highlight how clients are leveraging RominiStreet services globally to achieve their strategic goals across different industries, I'd like to share a case study from the fourth quarter. Cepasol, a leading automotive parts and service retail chain in Brazil, signed a seven-year agreement with RominiStreet to support its SAP applications. This move accelerates their digital transformation roadmap strategy by liberating limited resources, time, money, and personnel to focus on innovation projects. To support its business strategy, Tepesho sought partners that could align with its innovation and business transformation roadmap goals and vision. Their IT group was tasked with evaluating its current SAP system and the ROI of migrating to the next major SAP platform. After analyzing both the costs and risks associated with a complete platform re-implementation, it was determined there was no significant ROI to update or replace its current SAP applications. Nor could their IT team discern a benefit to its business transformation goals by doing so. Depecheur made the switch to Rumini Street because we are fully aligned with the way they want to run their business. The PASHOA thought Ramini Street was the right partner to keep their SAP ERP system running smoothly and help with their upcoming transformation and innovation projects. Oracle Litigation Update Ramini Street and Oracle have been in litigation for more than 12 years. While the U.S. courts have declared long ago that third-party software support is legal, we presently have two active proceedings with Oracle – the Rimini 2 and the injunction compliance dispute proceedings, both of which relate to the manner in which Rimini Street provides support services for certain Oracle product lines. Rimini Street versus Oracle, the case Rimini Street filed against Oracle in 2014 and known as Rimini 2, remains in a pretrial stage. We currently believe it is likely that the trial will proceed in 2023. With respect to the dispute the parties are currently engaged in over a permanent injunction that has been in place since 2018 and known as the injunction compliance dispute, the court issued an order on January 12, 2022, following an evidentiary hearing in September 2021. The permanent injunction at the center of the dispute defines the manner in which Remini Street could provide support services for certain Oracle product lines, but does not prohibit support of any Oracle products. Despite extensive discovery by Oracle that commenced over two years ago and included millions of pages of documents, only 10 items were ultimately before the court in the evidentiary hearing. In its finding an order from the hearings, The court ruled in favor of Ramini Street on five of the items. With respect to the other five items, the court found the company violated the permanent injunction, awarded sanctions of $630,000, and ordered that certain computer files be quarantined from use. The court also ordered Oracle may recover its reasonable attorney's fees. While Ramini Street respects and takes court orders and the law very seriously, and has implemented extensive processes and procedures to comply with both, we respectfully disagree with many of the court's findings. As such, we filed a Notice of Appeal to the U.S. Ninth Circuit Court of Appeals. In the meantime, we paid $630,000 to Oracle while preserving our right to be reimbursed for some or all of the payment on successful appeal. Following our Notice of Appeal, the U.S. District Court of Nevada issued a stay on the ordered reimbursement of Oracle's reasonable legal fees. Accordingly, we do not expect a resolution of a forthcoming appeal, possible reimbursement of some or all of the $630,000 in sanctions paid, or the amount of Oracle legal fees that may or may not be payable, if any at all, for likely at least a year or more. Please see our disclosures in the annual 10-day filing for additional information on the Oracle litigation. Summary. We continue working to complete our transformation and scaling project to support billion-dollar annual revenue operations and a 20% or better operating margin by 2026. Focusing on sales execution and productivity, exercising discipline, cash generation, and management, and bringing our litigation to a successful conclusion. Now with that, over to you, Michael.

Thank you, Seth, and good afternoon, everyone. Q4 and fiscal year 2021 results. Revenue for the fourth quarter was $99.3 million, and full-year revenue was $374.4 million. a year-over-year increase of 13 and 14.6% respectively. Annualized recurring revenue was 393 million, a year-over-year increase of 12.6%. Revenue retention rate for service subscriptions, which makes up 98.7% of our revenue, was 92% with more than 80% of subscription revenue non-cancelable for at least 12 months on a rolling basis. For the fourth quarter and the full year, clients within the United States represented 53% of total revenue, while international clients contributed 47%. Aggregate year-over-year revenue growth in the United States was 7.7% for the fourth quarter and 4.4% for the full year, while growth for international clients was 19.6% for the fourth quarter and 29% for the full year. On a cash flow basis, For full year 2021, we generated $67 million of operating cash flow, up 59% from the prior year. The increase was driven by strong renewals and by robust multi-year client prepayments. We are quite pleased with our cash flow yield of 17.9% for the year as our focus on maintaining significant operating cash flow generation increases. combined with our drastically reduced cost of capital, provides us with the ability to take advantage of key strategic opportunities that were not previously feasible. Billings for the fourth quarter were $155.9 million compared to $140.5 million for the prior year, an increase of 11%, and full-year billings were $417.8 million compared to $348.2 million, an increase of 20%. Multi-year prepayments for both renewals and for new client invoicing were strong throughout the year. Gross margin was 65.1% for the fourth quarter and 63.6% for full year 2021, which is well above our initial and upwardly revised guidance range of 61.5% to 62.5% compared to 61.8% for the prior year fourth quarter and 61.4% for full year 2020. We are pleased with our service delivery throughout 2021 and continue to methodically expand efficiencies and leverage through technology and process control. We expect to continue investing in the global service delivery capability and capacity for our new products, services and solutions to ensure we can deliver our best-in-class offerings with unparalleled client satisfaction. Therefore, For full year 2022, we are guiding gross margin to be in the range of 62.5% to 63.5% on a gap basis and 63% to 64% on a non-gap basis. Operating expenses. Like other companies globally, we are experiencing some cost pressures due to increased labor costs and inflation. However, we are successfully mitigating this challenge in part by broadening our hiring practices with an emphasis to recruit more positions in lower cost geographies and in part by using innovative technology such as our recently issued U.S. patent to gain more operating leverage. We plan to continue exploring all options available to ensure we are able to acquire the right talent at the right cost to meet our profitability and growth targets. Sales and marketing expenses as a percentage of revenue was 32.7% for the fourth quarter and 34.3% for full year 2021 below our guidance range compared to 34.5% for the prior year fourth quarter and 35.1% for full year 2020. We remain focused on making the appropriate investments needed to support our growth initiatives whereby we expect full year 2022 sales and marketing expenses to be in the range of 34.5 to 35.5% on a GAAP basis and 34 to 35% on a non-GAAP standpoint. General and administrative expenses as a percentage of revenue excluding outside litigation costs was 15.6% for the fourth quarter and 17.1% for full year 2021. At the top end of our upwardly revised guidance, compared to 16% for both the prior year fourth quarter and full year 2020. These one-time items occurred in the first half of the year, and as such, we do note that our G&A expenses did decline nearly 10% in the second half of the year versus the first half. Current and expected 2022 spend includes the investment in information systems, along with costs for additional personnel to support growth and costs as a public company and to support our continuing global compliance monitoring of our service delivery process and incremental professional legal audit and insurance costs. As a result, we expect G&A expenses as a percentage of revenue to be within the range of 16% to 17% for the full year 2022 and 14 and a half to 15 and a half percent on a non-GAAP basis. Net outside litigation expense was 2.7 million for the fourth quarter and 16.9 million for full year 2021 at the high end of our guidance range compared to 4.2 million for the prior year fourth quarter and 14.6 million for full year 2021. During the fourth quarter, we received an insurance recovery of 7.1 million for attorney costs related to Oracle litigation. In addition, we paid 630,000 to Oracle for court-ordered sanctions, and we accrued 6.9 million as an estimate for court-ordered reimbursement to Oracle for reasonable legal fees. However, as Seth noted, We are appealing the district court's ruling and we do not expect the resolution of our forthcoming appeal, possible reimbursement of some or all of the $630,000 in sanctions paid or the amount of Oracle legal fees that may or may not be payable, if any at all, for likely at least a year or more. Outside litigation spend is not linear and can fluctuate each quarter based on timing and the nature of litigation activities. we expect a likely moderate increase in litigation spend in 2022 compared to 2021 due to the noted appeal in preparation for the Rimini 2 trial, which we expect to more than likely occur in 2023. Accordingly, we expect outside litigation expense to be in the range of 15 to 20 million for the full year 2022, compared to 16.9 million for full year 2021. For the fourth quarter, net income was 70.1 million, or 77 cents per common share, and 75.2 million for full year 2021, or 51 cents per common share. This compares to the prior year fourth quarter loss of $4.2 million, or negative $0.06 per common share, and for prior year 2020, a loss of $15.2 million, or negative $0.21 per common share. Given the cumulative profitability over recent years and our outlook for continued profitability, we should benefit from our deferred tax assets and therefore recorded a deferred income tax gain during the fourth quarter. This gain of $62.3 million, which was offset by current income tax expense, led to a net income tax benefit in the fourth quarter of $60 million and $55.8 million for the full year. Moreover, our EPS was also positively impacted by the redemption in full of the Series A preferred in the third quarter as a result of which there are no longer any costs associated with this instrument negatively impacting earnings per share. Adjusted EBITDA was $19.3 million or 19.4% of revenue for the fourth quarter and $55.8 million or 14.9% of revenue for full year 2021. I would like to highlight our non-GAAP operating margin, which excludes outside litigation spend and stock-based compensation of 19.5% for the fourth quarter and 14.7% for full year 2021. That underscores the significant profitability potential and substantial leverage to our operating model such that we remain confident in our ability to achieve our long-term target of operating margins in excess of 20%. Warrant treatment. We realized a non-cash loss of $1.2 million during the fourth quarter and $4.2 million per full year 2021 relating to the $6.1 million private sponsor warrants with an exercise price of $11.50 that expire October 10, 2022. The condition that required liability accounting treatment is no longer in effect. and the settlement of this non-cash charge was applied to additional paid-in capital. Therefore, going forward, there is no longer a requirement of mark-to-market for any class of warrants such that we do not anticipate any further income statement impact associated with regard to the public or private value of any outstanding warrants. Balance sheet. We ended the fourth quarter with a record cash balance of $119.6 million, compared to $87.6 million for their prior year fourth quarter, up 36% year-over-year. This represents a positive swing in net liquidity of more than $100 million as we end 2021 with a net cash position of $36.3 million versus a $67.3 million net debt position at the end of 2020. Deferred revenue. as of December 31st, 2021, was approximately 300 million, up 17% from 257 million for the prior year fourth quarter. Backlog, which includes the sum of bill deferred revenue and non-cancellable future revenue, was approximately 593 million as of December 31st, 2021, up 7% from 556 million for the prior year fourth quarter. Capital market transactions. As Seth noted, today we announced that our Board of Directors has authorized the repurchase of up to $15 million of common stock over the next two years. The common stock repurchases may be affected through open market purchases, including through the use of Rule 10b-5-1 trading plans or privately negotiated transactions. The timing and amount of common stock repurchases made pursuant to the repurchase program are subject to various factors, including but not limited to the company's common stock trading price, regulatory requirements, credit agreement covenants, general market conditions, and alternate uses of capital. The company is not, however, required to acquire any particular amount of common stock at a specific time or price, and repurchases can be discontinued at any time without notice. With a strong cash position and consistent operating cash flow generation model, we believe the company is able to both continue funding growth while implementing this capital return plan for our shareholders. We plan to continue our methodical focus on improving execution to drive increasing free cash flow generation and improved profitability. Business outlook. We are currently providing first quarter 2022 revenue guidance to be in the range of $95 to $96 million and full year 2022 revenue guidance to be in the range of $400 to $410 million. This concludes our prepared remarks. Operator, we'll now take questions.

And thank you. We will now begin the question and answer session. If you have a question, please press star then one on your touchtone phone. Once again, if you have a question, it's star then one. And we do have a question from Brian Kinslinger. Go ahead, Brian.

Great, thanks so much. So the revenue guidance for the first quarter implies about a 3% to 4% decline from the December quarter. During the last five years, I checked revenue only declined sequentially during that tight period one time. So I'm curious, is that a result of a lost client? Is it lower pricing? Or any other details you can provide would be helpful.

Sure, Brian, Seth, I'll take that. You know, we took a look at a couple things. One, we wanted to be a little more conservative than the guidance we've provided in the past. We did this Revell survey, the perception survey relative to the both the analysts and the investors. And we're really trying to get ourselves positioned for a consistent beat and raise model. On top of that, we're looking at world events. Obviously, we have some very unknown issues that are happening between sanctions, reverberations around the world with the Ukrainian war, coupled with still having some challenges with COVID around the world, especially in Asia-Pacific. So we felt it was just better to be a little conservative and be in a position to walk up over the course of the year. And you've seen it not only the quarter guidance being conservative, but the annual guidance for 2022, we took a more conservative position as well. Okay.

And then in terms of sales execution, you mentioned it's already beginning to get better from the fourth quarter to the third quarter. But the biggest sales period where you see the most demand and opportunity is ahead, I think, two quarters ahead. What gives you the confidence that this team is that much stronger or that the sales execution will be much stronger when you see the grunt of the pipeline addressable?

So I think a few things, Ryan. We've got, first, as I mentioned in the prepared remarks, we've got more large deals in various stages of sales process than we've ever had as a company. So that's data point number one. Number two, as we talked about with the third quarter, we had a lot of people out on the field who hadn't had enough experience and had fumbled the ball in terms of being able to bring the deal home. But it wasn't just the sales reps that didn't have experience. We were missing a lot of key sales management to support all those players on the field. And if you look at what we announced in the last couple days, even this morning, the merger to the Americas Theater, we added some additional GMs that we had empty positions for. We're about to fill, we believe, the last of those GM positions. We hired a new CMO. Our transition of marketing to being an inbound marketing organization is proceeding. So all the data points relative to the challenges of the third quarter, we see those as being remediated. We see improvement. Again, we saw incremental improvement in the sales performance in the fourth quarter in terms of sales productivity. So we're maturing the team now. They're gaining experience. The leaders are gaining experience in closing deals. We closed a lot of great logos all across the world, across the product lines. So I think all of that is giving us good confidence that we are continuing to move in the right direction of maturing a team that can deliver the kind of numbers that we want to see in 2022 and beyond.

Great. Last question I've got, and then I'll get back in the queue. is it's marginal, and while it's still super, retention rate, I think in the fourth quarter was 90%, and that's by 1% or 2%, maybe even 3%, one of the lowest you've had in eight quarters or so. Is that something to think about materially? Did you lose a customer? Was there a merger that happened? Or would you suggest 90% isn't all that material compared to where you've been for a while at 92%?

Well, we actually were 92%. It was over, during part of the prepared comments, it was over 90%, but it was actually 92 for the trailing 12 months of December 31, 21, and 20. So it was actually, it was on par.

Okay. All right. Thank you. Sure.

Thanks, Brian. And our next question comes from Jeff Van Ree. Go ahead, Jeff.

Great. Thanks for taking the questions and love the cash flow and some good progress there on margins as well. I guess on the sales side, I want to revisit the prior question a little bit more. Talk to both recruiting in terms of incremental heads, where you are in an absolute sense, how many you've been able to attract, how the retention is going. We all know very, very tough market to find sales talent. You're looking for a very unique skill set. You've got a lot of moving parts on the leadership side. What are you seeing in terms of the recruiting and retention? Maybe start there.

Sure, Jeff. I thought you were going to lead with our capital return program, which I think a lot of people will be excited about. I think the recruiting is tough. There's no doubt about that. Everyone is facing that. You know that across all your checks. I think that we ended the quarter on a sales rep basis around 78, 79 heads compared to the prior 12-month-ago period, which is about 69. So roughly 12%, 13% increase in total heads. But I think that that's not the real measure as much as the quality and the quantitative aspects. We've hired some great people on the sales side. We've been adding in a lot of sales management talent. across the world, especially North America, and you saw the numbers came up, and you knew that I was aiming for a 10% exit for the U.S. market coming out of the year. We came out at 7% at the end of the quarter, so that was good. We're moving in the right direction compared to where we were flat. So I do think that the metrics are supporting that this management team, the hires are kicking in very nicely in an incremental way as they get better. So I think the recruiting has been okay. It's tough. But we are getting good people in the door, and we're getting them trained up. And I think that, as we pointed out in the third quarter, It was really the tenure level that we know that people who were with us 18 months or more were generating 90% plus attainment numbers. And that was starkly higher than those less than 18 months in tenure. And it was black and white between the two. And you know, as we've talked about and as we've mentioned on prior calls, one of our key objectives of sales enablement is to bring down that ramp time 18 months is a long ramp to get to that sort of 90% plus attainment number. We're trying to get that down below a year, which will allow us to accelerate revenue much faster.

Yeah, and that was going to be my follow-on. Just in terms of the reps, I know you've swapped out a lot of talent, brought a lot of new talent in. Is there any evidence of that yet? Are we still thinking, you know, let's just leave it at 18 and we'll see, or have you seen some cohorts that are showing signs of faster ramps?

I think we're still in that 16 to 18 months. I don't think we've seen that come down dramatically yet. But we are seeing, I think an important data point is, we have seen that our new reps, which we believe are bringing in some great talent, has been closing their first deals faster than we've had in prior times. So I do think that that's a positive note. And that does bode well for believing that we can bring the ramp down from that 18 months because once a seller gets a full deal cycle under their belt, they know how to talk to the right people, they know how to get a contract done, they know how to get a closing done with a client. That's a huge step forward. Obviously, the second deal is easier than the first, learning procedurally. So I think the fact that we're getting sellers to close those first deals earlier bodes well for bringing down that 18 months.

And anything you can share, the S&M numbers, I mean, obviously wages are up, but also beyond that, it looks like overall spending up. Can you give us a sense of where you think you're going to end on that hiring front?

In terms of, I think for the year, we're aiming between 95 and 100 heads for 2022. And, you know, we've moderated a little bit because we've been focusing more on productivity per head. And, yes, you're right. I mean, the sales comp has gone over the last few years from about a 240 OTE, 260, 280, and you're right now around $300,000 a year. for a $2.2 million quota. So yeah, it has gone up, but most of it, especially for us because we're 50-50 generally around the world between base and incentive comp, you're really performance-based on that. So you're not going to feel all of that coming through unless they're truly bringing in the full type of quota.

Yep. Great. And if I could just sneak one other in there. Obviously, again, a lot of new leadership and marketing is another focus area for you. You commented on the large deal pipeline setting records. I wonder if you'd comment on the overall value of the pipeline and also in the context of where that organization is. Because they've got new leadership there, are we going to be in a position where there's not enough getting stuffed in the top of the funnel even if you have the reps? So maybe just those two questions there.

Yeah, I think, Jeff, there isn't anybody who would ever tell you they wouldn't love more pipe. But I do think the diversity of pipe, the breadth of pipe, it really depends on the region. You know, we strive for, ideally, a 4X pipeline. A lot of companies strive for a 3X. We like a 4X. I would say some regions are around that. Some are a little less than that. It's a little bit lumpy, but I think that with the procedures we're putting in place between marketing and the pipeline management systems and the execution discipline we're putting in, I feel really good that the combination of the changes we're making at marketing, the local regional marketing people we've put in place, we've up-leveled our marketing around the world. I believe the combination of those will get us a nice, healthy 4X pipeline that across and consistently. It's going to take us probably another quarter or two with the new marketing programs by the time you run through generally six months to a year to pull through a deal from beginning lead all the way through close. So my sense is, yeah, we're going to get to the forex.

Great. Appreciate it. Thanks.

Sure.

Thanks. And our next question comes from Derek Wood. Go ahead, Derek.

Oh, great. Thanks, guys. It's Andrew on for Derek. Congrats on the strong quarter. Maybe just on the announcement today on the Americas theater change, maybe just walk us through that decision and how this should improve performance in the U.S. and the time frame for achieving that.

Sure. Sure. What we've done is we've been taking several steps. And I think you've seen that we, as you know, are focused on a balance between profitability, cash flow, building strong cash position, and growth. And that's always been a balance. It's always been our goal is to be in between. We're not a growth at all cost company. And I think that's paid off, as you've seen in the massive balance sheet switch to really having a net cash position that's very strong. So I think all of that's been playing out well. We've also been focused on growth and scale. And when we think about as we head towards this billion-dollar target and 20% plus operating profit, we're looking at structures. And as you would expect, we're looking for economies of scale. And one of those we just took care of in the last couple months, which was we integrated our Eastern European and Israeli markets theater with EMEA. So now it's all under just the EMEA umbrella. And we're reducing redundant positions and infrastructure that comes with each theater because each theater has its own operation. They're modified P&Ls. And we took a look at North America and we took a look at Latin America. And like a lot of other companies, they operate with single America's leadership. And we felt that we could, again, cut costs. We could integrate, get better efficiencies by combining those theaters and be in a position to really offer our clients a far broader regional team of expertise. And that's a really important part, as you know, with our extraordinary client experience goal. So it really is a win-win for us all around. And, you know, we're going to continue to look for opportunities to consolidate and bring scale into the organization.

Great. It looked like the international growth slowed a little bit. Anything to call out there? And how should we think about that growth this year?

Yeah, for the fourth quarter, it was down a little bit. I think part of that is really, you know, if you break it down, one, we had some FX components to it, but you're talking about a $4 million difference generally versus what would have been a standard 29, 30% type number. But we also saw the fact that we had flow-through revenue from the third quarter that we didn't get. And that flowed through and, of course, acted as a deficit against the fourth quarter revenue on a ratable basis. So the combination between those really, we believe, led to that particular number. But we don't see it as it's not a trend. It's just a particular quarter.

Okay, great. And then the slip deals from last quarter, it sounded like you had a pretty strong big deal quarter. Did those close in the quarter? Or if not, are they still in play?

Well, as we mentioned, for the fourth quarter, we closed the second largest deal in our history, and that was in the Americas, by the way. again, just part of America rising again. And on the other side of it, we did have a slipped deal, a very large one from the fourth quarter that moved into the first quarter. That's an international deal, and yes, it did close.

Great. That's it for me. Thanks, guys.

Thank you. And we have no more questions at this time. I'd like to turn it back to the speakers for closing comments.

Well, that's great. Thank you very much, Darrell. Appreciate that. And thank you, everybody. Please stay safe out there. If we have additional follow-up questions, please contact our IR team. We'll be happy to follow through with those questions. And we'll look forward to seeing everybody on the first quarter call coming up pretty soon. Thank you very much, everyone. Have a good day.

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.