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spk00: Good day, ladies and gentlemen. Today we are hosting a conference call to discuss the second quarter 2021 financial results for VIQ Solutions, Inc. At this time, our participants are in a listen-only mode. For those that dialed in, should you require any assistance during the call, please press star, then zero on your touchtone phone. We will have a question and answer session at the end of the call, at which time all participants wishing to ask a question will be instructed to press star one and identify themselves before asking the question. Please limit yourself to one to two questions so that others may have a chance to ask questions. You may re-enter the queue. Your host for today is Ms. Laura Kiernan, Head of Investor Relations for VIQ. Please go ahead.
spk01: Thank you, Stephanie. Good morning, everyone, and welcome to VI Solutions' second quarter results call. Before we begin, I would like to point out that certain statements made on today's call contain forward-looking information. subject to known and unknown risks, uncertainties, and other factors. For complete discussion of the risks and uncertainties facing BIQ, we refer you to the company's MDMA and other continuous disclosure filings, which are available on CDAR at cdar.com and on sec.gov. As a reminder, all dollar amounts are in U.S. dollars unless otherwise stated. With us today, we have Sebastian Paré, the CEO, Alexi Edwards, CFO, and Susan Sumner, President and Chief Operating Officer of BIQ, all of whom will be available for questions following the conversation. Following comments from each of them, we will do a Q&A session. I will now turn the call over to Sebastian Paré to begin.
spk04: Thank you, Laura. Welcome, everyone, to our second quarter 2021 earnings call. Last Thursday, we reached a significant milestone and began trading on NASDAQ stock exchange under the ticker Sambol EQS. This milestone cements our commitment to change the way evolutionary documentation is captured, transformed, analyzed, and distributed. While we were disappointed to cancel the capital raise in conjunction with the NASDAQ listing due to the shifting market conditions and pricing of the final offering, we met our commitments to list on NASDAQ. This was not a small feat. It required us to do an extensive reporting and due diligence with accounting, legal, banking, and other professionals to file our base shell prospectus, our F10, our F8 in the United States, and other compliance, all to meet the NASDAQ requirements. This involved an investment of considerable time and effort, all while we continued to proceed with growing our business and doing due diligence on potential acquisitions. We believe the recent pullback in our stock price was in part due to the market conditions, but also impacted by the provisions of our preliminary results and outlook, which was below expectations. We will speak more about that later, and I'm sure we'll get into it during the Q&A. Additional feedback from the market also suggests that the price action lately may also have been driven in part by the lack of announcements on M&A activity over the past year. We heard this feedback loud and clear, and now we have the listing and the prospectus in the United States and in Canada in the rear mirror view, and have completed due diligence on the robust outline of transactions. We expect to begin announcing acquisitions in the near term. Based on financial structures we have successfully deployed in the past, we do have sufficient cash at hand to close on the number of planned acquisitions in the second half of this year. In keeping perspective on this past year's results and first half of this year, we are executing on what we said we will do so far in the areas of technology innovation, expansion of sales and marketing, M&A, and due diligence on much larger strategic acquisitions and many additional corporate milestones that we committed to. None of these fundamental long-term value creation milestones are driven by the fluctuations of the markets and how our stock goes through this cycle. We've said it many times, we operate the business and execute on our growth plan by focusing on the long-term value creation for our shareholders and not short-term quarterly results. Our core strategy has not changed. In fact, it got stronger lately. It still rests on driving revenue growth both organically and to the right type of accretive acquisition, improving the quality of our revenue as we begin to evolve towards a SaaS and AI pricing model this year, all of which are expected to drive higher productivity gains, enabling gross margin expansion, and EBITDA cash flow generation. Susan will speak to some of these gains in her remarks. Our capital markets initiatives have placed us well in the United States and in Canada, and we're now on national exchanges. We expect this move will lead to progressively increased investment by a more diversified global high-quality investors, providing over time higher liquidity, which is positive for all shareholders. You will notice a lot of expense flowing to our income statement this year as we execute on several corporate milestones related to the acceleration of our technology innovation, global expansion in sales and marketing, and public market related initiatives in the first half of 2021. The significant, unusual, one-time expenses associated with these corporate milestones are and will be included in our results. And other than the equity compensation expenses and restructuring costs have not been backed out of the adjusted EBITDA. When considering this, we will have generated a positive adjusted EBITDA in the quarter of $300,000 and close to $800,000 in the first half of this year, despite the delays in the new contracts due to COVID lockdowns, particularly in Australia and in the UK. Investment include upfront expenses in cost of sale, employee retention related to staffing for backlog, an expanded contract in Australia, banking, legal, and advisory fees related to NASDAQ listing, and due diligence for the second half of the year plan acquisitions. These significant one-time fees are estimated to be approximately $200,000 in the first quarter, $600,000 in the second quarter, and will also be included in the second half of the year, depending on the timing of the closure on the acquisitions. These expenses, while considered one-time in nature, were not eliminated as part of the company-reported adjusted EBITDA calculations. We still have more of these expenses to realize in the back half of this year as M&A due diligence converts into closings, which will impact the third quarter and the end of the quarter, depending on timing. These significant investments in a variety of corporate actions during the year are aimed at executing key milestones and setting up the company for a jump out of the gate when our new contracts begin and we emerge from the COVID lockdown, particularly in Australia and the UK. Now I will hand it over to Alexi to provide a high level on our financial results for the quarter. We will also be followed by Susan who will provide some insight into our operations. And then Susan will hand it back to me to begin the P&A.
spk03: Alexi? Thank you, Sebastian. And depending on where you are, good afternoon, good evening, and good morning, everyone. Our second quarter 2021 financial highlights include the following. We generated revenue of $8.2 million in the quarter compared to $8.3 million in the same quarter of 2020 and its first quarter of 2021. The decrease of approximately 1%, both year-over-year and sequentially, was driven by delayed revenue resulting from COVID-19 impacts as courts in Australia and in the UK were intermittently shut down. The estimated COVID-19 related impact on revenue in the quarter exceeded $1 million and was moved into backlog. Growth profit of $4 million represented 49% of revenue compared to $5 million or 61% of revenue in the same quarter of 2020. The decrease in gross margin for the three months ended June 30th, 2021 versus the prior year was primarily related to a few factors including Delayed revenue due to the COVID-19 shutdown moving into backlog. Second, preparation costs for new contracts for which revenues are expected to commence during the second half of 21. Thirdly, strategic operating commitments to maintain our editing capacity to meet expected demand. And fourthly, lower COVID-19 wage subsidies received in Q2 21 versus prior year. Our adjusted EBITDA was negative 0.3 million versus prior-year adjusted EBITDA of 1.8 million. In addition to the gross profit impacts previously mentioned, the decrease in adjusted EBITDA was driven by approximately 0.6 million in one-time professional service fees associated with completion of capital market milestones, including NASDAQ listing, filing the base shelf prospectus, and S-10 registration statement in the U.S. and acquisition due diligence. Net loss was $10.5 million versus net loss of $1 million in 2020. Approximately $6.7 million of the current quarter's loss is related to non-cash stock-based compensation following the shareholder approval of the new omnibus plan and approximately $0.2 million in restructuring-related expenses. We continue to focus on improving the quality of our revenue as we grow our fast strategy and AI innovation at a faster pace. First draft, powered by AI Sys, creates machine-based documentation with breakthrough accuracy and has proven to improve gross margin by approximately 80% when compared to traditional services. We're improving our productivity and scalability. which should drive significant margin expansion in the future. Now turning to our first half of 2021 financial highlights. We generated revenue of $16.4 million, which represented an increase of 4% compared to $15.8 million in revenue in 2020. Gross profit of $8 million represented 49% of revenue versus $8.3 million or 52% in 2020. Growth profits for the six months of 21 were negatively impacted by the effect of COVID-19 shutdowns, as I mentioned earlier, including delayed revenue and reduced COVID-19 subsidies of approximately $1.1 million, while we retained our workforce ahead of the delivery of existing customers and new contract schedules for the second half of 21. Our adjusted EBITDA was nil compared to a positive 2.4 million in 2020. The adjusted EBITDA was negatively impacted by lower gross margins and higher SG&A expenses related to corporate initiatives of 0.8 million as previously described. Net loss was 12.2 million versus a net loss of 7.7 million in 2020. Approximately $6.8 million of the current period loss relates to non-cash stock-based compensation following the shareholder approval of new omnibus plan, $0.8 million related to corporate initiatives, and approximately $0.4 million in restructuring-related expenses. In the first half of the year, we generated 59% of our revenue in the United States, 30% in Australia, and 11% in EMEA and Canada. Our $12 million cash balance at the quarter end provides ample liquidity to begin acquiring more accretive companies with a tremendous amount of rich domain specific content to help us improve our offerings and expand our client base globally while maintaining a substantial pipeline of potential acquisitions to consider. We reiterate our anticipated revenue in the third quarter to be in the range of $8.2 to $8.5 million. Gross margin are expected to be in the range of 46% to 47%. Gross margin estimates do not include any potential positive impact related to wage subsidies. We continue to execute our planned commitment to scale our technology, editing infrastructure, and sales globally to meet new demands and opportunities for our products and services. We expect several costs related to one-time strategic initiatives during the quarter related to corporate milestones, including acquisition and capital market-related expenses. Now, I would like to hand it over to Susan to speak to our operational highlights. Susan?
spk01: Thank you, Alexei, and good morning, everyone. Earlier this month, we provided a look into our operational results. At that time, we felt it was prudent to align our expectations, given slower-than-expected recovery with our core segments, and lockdowns in Australia and the UK, which delayed some revenue. Despite the impact on our revenue, we decided to protect our workforce in preparation for those with existing accounts, as well as new contracts that are expected to begin when we emerge from these region-specific lockdowns. These shutdowns also temporarily impacted our gross margin as we incurred expenses without revenue. The level of subsidies to offset the impact was significantly reduced this year versus the prior year with approximately $2.8 million less in COVID wage subsidies. We remain on track to grow organically this year, and next year it's double-digit rates despite the impacts of COVID-19, which continue to affect some of our company's most important verticals and regions, including Australia and the courts. Our scalable technology utilizes sophisticated architecture and intelligent AI designed to securely ingest a significant amount of evidentiary content to produce accurate, verbatim, highly diarized documents on mission-critical events that have a lasting impact on social and financial environments. Our AI-powered workflow processed over 20 million minutes of recorded multi-speaker, multi-channel audio and video in 2020 and transcribed more than 40 million pages of secure industry-specific evidence-based documentation, creating actionable information for use by more than our 1,800 clients worldwide. We said we planned to be big and bold this year. We generated consistent growth in multi-speaker, highly regulated, evidentiary voice and video data in our core verticals across the globe. The U.S. total addressable market in industries we serve is estimated to be over $10 billion, with an annual CAGR of 6.1%. This highlights the increased need for technology and innovative capabilities to manage that vast amount of data. Our proprietary workflow solution powered by AI, will drive transformation in the marketplace while driving margin expansion. We believe we are the leader in our core verticals, providing advanced technology solutions, solving compliance and workflow challenges for our global client base. And with the addition of First Draft, powered by AI Assist, we will expand the overall opportunity to digitize an entire library of client content versus only critical files that are professionally edited for final consumption today. Our product innovation remains central to our core strategy, and there are initiatives to drive revenue and increase gross margin. We expect to migrate clients to bundled SAS hybrid pricing models during the fourth quarter of 2021 and accelerating during 2022. These pricing models are expected to drive stronger growth, long-term client relationships, and predictable recurring revenue at higher margins. And this concludes our formal updates. Operator, if you would open the line for questions.
spk00: Thank you. As a reminder, if you would like to ask an audio question, please press star followed by the number one on your touchtone phone. Once again, that is star one to ask a question. And your first question is from the line of Scott Buck with H.C. Wainwright.
spk04: Hi, good morning, guys. Morning, Scott. You tell us what the revenue impact was in the quarter from some of these new and extended COVID restrictions, especially in Australia and the U.K.? ? Yeah, so what we've stated is there was at least around $1.5 million in terms of delayed revenue in the second quarter that was directly linked to those delays. So it's basically that number that was directly linked, and we've gone through that process to identify that. So $1.5 million of revenue in Q2 that got moved to Q3 and Q4. Okay, perfect. And then tell me a little bit about what the pipeline looks like across the verticals and how those conversations are going. I'm curious if, you know, the variants and some of these restrictions have kind of slowed those conversations or whether or not you're still finding a lot of, you know, engagement from potential customers. Yeah, so there's really three components, Scott. There's the backlog, obviously, that we just talked about that is getting stronger and stronger. So despite the COVID impact, we do have an historical backlog halfway through the year. And that came from organic growth from new orders, but also some of the largest contract in our history that we've announced in Australia earlier this year. So between those two, we have a record backlog. And that was part of the reason why. the decision was made that despite the softness on the revenue, that the worst thing we could do is to address our workforce, even without the subsidies, because of the size of the backlog and the commencement on those contracts. So we wanted to make sure the street understands the decision that was made was in the context of those backlogs and the timing of commencing those contracts. Susan, you might have additional callers as well.
spk01: Yeah, I mean, Scott, I'll just take it through kind of an overview of each of the core verticals. You know, our core business from a services perspective in court is in Australia, and I think everybody knows where we're at with that right now in Sydney and Melbourne, both being completely in lockdown. But we have maintained and preserved our staff, and so that certainly had a certain margin. In terms of the courts globally, we are seeing a lot of new RFPs that are being generated both for our capture technologies as well as for our services. And interesting, proving out our strategy, many of these RFPs are multi-product. So we are now being able to include for delivery in Q4 in some of those RFPs the products also related to first draft. So with that, We also look at insurance, and insurance has been an interesting one. Most of that revenue is in the United States, and that revenue has been delayed in terms of recovery. We expected that we would see almost full recovery in starting to end this quarter, and we found that a lot of the revenue for insurance has actually been more delayed than expected. not in a meaningful way, but the car accidents that actually drive the statements of record, which is the predominance of our business, was actually tied to the end of the year. So we're beginning to see that build up in the second half of this year when we kind of expected the buildup to begin in Q1. But in terms of our pipeline, the overall pipeline, again, it's very interesting that we are now getting new bids from new insurance companies to provide responses that are multi-product in nature. So they include both translation services as well as traditional services and the opportunity to provide first draft to those customers. And law enforcement is the same thing. I would say the big pivot is we're starting to see more activity, but in places like the UK, a big bit that we've been waiting on. We expected to hear in January. It was then delayed till June, and now it's been set back to September. So it's a little bit all over the place, but we are seeing light at the end of the tunnel relative to the build of the pipeline.
spk04: Okay, perfect. That's very helpful. Last one for me. I heard the term accretive M&A used a few times during the call. I'm curious, is accretion, you know, priority one when you're looking at transactions at this point? And how does, you know, geographic expense impact, you know, product, et cetera, kind of fit into the list of priorities for M&A? Yeah, Scott, we – We obviously built quite a brand around acquisitions. We actually have developed a very significant blueprint that we've used for acquisition, integration, and then the migration towards the new technology stack and taking gross margin and double and tripling that. So on the back of that, we have been very specific early this year on what we were looking for. and we found really outstanding acquisition targets that we've been working through. And as we said earlier, obviously a big part of the cost in Q2, and you'll see some of that percolating in Q3 as well as we close, is directly related to all that work. Now, we fully understand that the markets might have expected closure on some of those, but one of the commitments we've made is we always play the long game We always play the longer-term value, and we're not going to deviate from our blueprint. And with COVID and a lot of those things, a few things got moved. So we've got incredible targets in the United States that will be coming true. And some of those targets have a footprint also in other parts of the world. We also have targets that have a perfect fit for expanding our offering into other areas as well. And I think all of this will be coming in for full disclosure throughout the quarter and before the end of the year. So to answer your question, Scott, it's where we've done before as far as the United States, but some of them come with an international footprint. But we've also made it very clear that that we have increased significantly our footprint and pipeline in the EME, particularly in Europe and in Australia as part of the Asia PAC growth. And you will expect to see some of those acquisitions also in those areas.
spk03: All right, that's very helpful, Sebastian. I appreciate the time today, guys. Thank you.
spk01: Thank you.
spk00: Your next question is from the line of Pat Walravens of JMP.
spk05: Okay, thank you, and congratulations on the NASDAQ listing. So I guess big picture, Sebastian, I think if you're a new investor, you look at last year and growth was 27%, and then you look at Q1 and it was 9, and Q2 and it was negative 1, and the guidance for Q3 is now 3%. So I guess what would be really helpful is if you could just sort of share information your view in terms of what the path to reacceleration looks like.
spk04: Yeah, so we've obviously been carefully analyzing all those moving parts, you know, over the last couple of months. But now, I mean, subject to a few things of what's going on in Asia, particularly in Australia, We're comfortable to talk about the 10 to 15 range growth organically for this year, despite all of those delays. So that's the range that we've got set up and we feel very bullish about because of the backlog. both organic from existing customer base, but also the commencements and some of those new contracts that were announced. But really, that's going to take us to be around a 20-25% organic growth range for 2022 onwards out of the base for 2021. So those are the ones, Pat, that we kind of settled on in the last couple of weeks, obviously subject to a lot of the moving parts. But that's what we've done as far as looking really at what we've got committed already in terms of net new orders that came in that will be initiated in the third and the fourth quarter, as well as new larger contracts, which we've been spending time and money to get ready for. At one point, those contracts will be commencing in the second half of the year. So that's 10% to 15% for this year. And then in terms of next year, we believe conservatively, based on what we've got in the pipeline as well, that a 20%, 25% organic growth for 2022 is what we will deliver it on.
spk05: Okay. That's super. Thank you. And then can you guys just touch on two other topics? And I'll just throw them both out now. So One is just what the competitive environment looks like for you, both in the U.S. and overseas, and then maybe just a little more detail about the migration to bundled pricing.
spk04: Susan, do you want to take that one?
spk01: Sure. I will start competitive. It really hasn't changed. I mean, we are much more discriminating around the markets where we choose to play. We're competitive positioning. I mean, I'll use U.S. court services as an example. where the price points aren't preserved relative to where we are defining value. We are in a really good competitive situation relative to the Asia-Pac and the EMEA markets. We're winning a lot of contracts in Africa right now for both our technologies, and we're in trials with our services workflow platforms. Not seeing a lot of competition in Africa right now, which is the emerging market that has a lot of legacy Capture Pro technologies there. In the U.S., the competitive forefront hasn't changed, really. We're still competing against a lot of small players that seem to have had issues in capacity scaling over the last year. So we believe that as the competitors are emerging from COVID, they won't be as strong as we are, both from security as well as from scale. That said, the bids are out there. There are a lot of small players that have delivered very high-quality service, and we consider them not only worthy competitors but also potential M&A targets. In terms of the bundled pricing, we've invested a lot of money this year in preparing the integration of both the NetSuite and NetScribe solutions to be able to create much more effective, much more innovative bundling that will to the ultimate fast delivery that we will begin marketing in the fourth quarter of this year. What that will provide for is a way to use a cellular-like model to be able to deliver bundles of minutes related to the combination of first draft of edited transcription services and translation services that will be based on the unique characteristics of the individual markets that we're serving. We're very excited about it, and it has been a major investment Um, oddly enough, the, uh, the technology, the integration of billing systems, we want to make sure we do a good job with that. And, uh, we're very, we're very excited about the progress. All right.
spk05: Great. Thank you very much. Thank you, Pat.
spk00: Your next question is from the line of of paradigm capital.
spk02: Hi, good morning, everyone.
spk01: Morning.
spk02: So just a question on, you know, you mentioned production efficiency that you have been taking on with the first draft. Can you unpack why the margins are falling next quarter as well, and when will be the time when you're presuming that the mid-50% margins?
spk01: So would you like me to take that one?
spk04: Yeah, particularly with what we've seen, Susan, in terms of the productivity gains in our revenue in the last few months. Go ahead.
spk01: So I will break this into a couple of answers to your question because I think that when we look at margin, the gross margin on a consolidated basis, we've got a lot packed into that number. And I think related to the productivity improvement, I think that's a good place to start. First of all, none of our numbers will show the effect of first drafts. That will not be commercially available until into the fourth quarter of this year. While we are in active beta with some pretty big-name customers, the requirement to be able to create the billing environments and some of the integrated technologies that wrap around that are still in beta. And so, again, you'll see the effect of that margin as we exit Q4 and really aggressively get into selling these bundles in 2022. Right now, though, the exciting news is if you look at the services organization in the United States, And you look at the progression in Q2 from May to June. It was a meaningful progression. In May, we had a lot of negative influences over the gross margin related to hiring in Australia and testing and preparation for the large contract that we will begin commencing. You also had a lot of influence over – Wage accelerations that we had to provide for the independent contractors are not wages but payments, bonuses, to grow the productivity as they were adjusting to the new platform and also to moving from being transcriptionists to editors. So when you go through a major migration like that, you're always going to see a downward push on gross margins. As the proficiency increases and the margin increases, that recovery starts to happen. So what's happening in Q3 is that we are now so confident in the technology that we're delivering and seeing so much productivity improvement from the editors that we are now changing the contract basis for the way that we pay those editors. And it's dropping from an average of about seven cents a line to about four to three and a half to four cents a line. So that's where you will begin to see this acceleration from the 40s into the 50s. The other thing that negatively impacted the margins was that we had technology sales that have been delayed because of the offset of COVID in both Africa as well as in the UK. So good things happening. This is all exactly what we talked about in Q1 and the predictability around the acceleration of the migration to the new platform. We knew that it would drive down and negatively impact close margins slightly. We also knew that we would need to accelerate productivity through that process. So we feel very good about where we are toward getting to the mid-50s toward the end of the year.
spk03: And, Saurabh, if I should just add to Susan's comment, in Q2, Q2 is impacted by wage subsidies, and the impact on gross margin there was 2.7%. So if you back that out of the reported 48.6% gross margin in Q2, it was 45.9% without wage subsidies, and no wage subsidies have been forecasted for Q3.
spk01: So they are actually on a pure basis accelerating, not decelerating, right?
spk02: Got it. Thanks for that. And just one last question on the sensitivity of lockdown in Australia to the revenue. Last year, you had 30 million contacts with the Queensland. And how do you think the exposure is going to be? Do those contracts are also linked to the lockdowns as well?
spk01: So Brisbane has only been locked down for two weeks. And while we certainly can't anticipate what the future of COVID is, the primary effect of COVID right now in Australia is in Sydney and Melbourne.
spk02: Got it. Okay. So in the last call, you mentioned that those revenues are going to hit in the quarter third of 2021. Is this still the same?
spk01: The Queensland revenues?
spk02: Yeah.
spk01: Well, we're in testing right now. We don't anticipate any changes to that. And again, I'm very COVID nervous right now, but we know nothing about COVID that would negatively impact that.
spk02: Got it. Okay. Thank you so much. Thank you.
spk00: Your next question is from the line of Marla Marin of Vaxx.
spk01: Hi, thanks. Good morning.
spk04: Good morning. Thank you.
spk01: Good morning, Marla. Good morning. So you briefly alluded to first draft. And it's currently in beta testing stages without really giving us any kind of concrete details can you talk around anything that you're seeing during the data testing phase that you know might have surprised you in terms of adoption consumer you know enthusiasm for it or you know anything else that that you care to share yeah marla the uh
spk04: You know, Susan, I think it's important to clarify that first draft has been used within the VIQ ecosystem already for almost a year and a half. That was the entire migration to the technology stack. So what we're referring to now is based on the confidence based on the quality of the industry specific language models that have been built that is now pushing the accuracy of the first draft to a record high in the industry what we said is we're now starting to commercially sell first draft to some of our clients I think that's an important distinction Susan yeah I would say a couple of takeaways that we've learned through data one is that
spk01: The interest in the low end of our market, meaning small law enforcement agencies that are now being forced to go from handwritten notes to digitized content, is really, really much more interesting than we expected it to be to the law enforcement officers. So there are two elements to First Draft that are, to me, very different than any of the competitors. One, that we... provide an adoption program, or we will be. We're building it into our final product offering. And if you think about the days of nuance, and that's where I come from, the work that they had to go through to get Dragon adopted by physicians, we're replicating that to make sure that individual law enforcement officers know how to actually go from handwritten notes to self-edit and self-documentation. in a self-service way. But also what differentiates our product is that if for some reason the document isn't usable by the law enforcement agency, we have an opt-out built into the product that we believe doesn't exist anywhere else that will send it to our editing tools to allow them to create that document that can be used for evidentiary purposes. So that's in the LE space where it has been much more widely embraced in the beta environment than we expected. The learning was, though, that we also have to incorporate adoption programs to ensure that they know how to use the technology. On the media side, that's really where we have seen the most interest, and it's been built into two contracts that we've just gotten that we're in the process of finalizing with two major media organizations. And also driving the next generation of First Draft, which will be launched into Theta at the end of this year, which is for the snippets, which takes it from First Draft is near real-time. So a six-hour file will be delivered in about 22 minutes. In Q4, we will launch snippets that will deliver real-time editing, almost like a captioning service, but not, because we will not deliver it as a regulated product. but as a real time to final edited document that will be an enhancement and an overlay to first draft. So those, I would say, are the core learnings that we've gotten from what we've done so far. Okay, thank you for that comprehensive answer. And then one other question, which is, as you shift to the bundled strategy that you talked about earlier with the potential positive impact on margins, Are you expecting that you potentially might lose some of the lower margin accounts or the accounts that aren't willing to make that shift to the bundled model? And if you are, to what extent is that already baked into the outlook that you talked about earlier? Thank you. We don't expect that the bundles will replace. I mean, you know, I've said to many people that we know that this is a migration toward these services. We are not going to stop to deliver traditional services. It will be an alternative. We believe it will be a better offering both for the enterprise customer as well as the medium and small customer size. But we will continue to offer traditional services just because we have to. We believe that it's going to take at least a year to a year and a half to train the easier markets, and we will have to still match in the RFP cycles to be able to evolve that into the way that court systems and big insurance companies buy. Okay, thank you.
spk03: Thank you, Marla. Thanks, Marla.
spk00: Thank you. And that does conclude our Q&A session for today. I'll turn the call back over to Sebastian Perrier, CEO, for closing remarks.
spk04: Well, thank you, everyone, for joining us today on the call. We appreciate the support of our long-term shareholders, as well as many new investors that believe in our long-term global growth strategy. Many of these shareholders and new investors are strategically taking advantage of the latest significant correction to come in into our stock ahead of the next cycle based on the fact that the fundamentals are actually getting stronger, both for the technology as well as for the migration, despite the drag in the short-term profitability for the investments we're making in the long-term growth of the company. NASDAQ was always a commitment. It was surely not an easy one, but we did it. Now we can level up and we can begin our next capital market cycle driven by higher liquidity and new diversified global shareholders who can now enter our stock. We're excited about the future of VIQ as we continue to execute on our proven growth plan. This year is not a year, the year is not over yet, and we have a number of updates on M&A in the not-so-distant future that will allow our shareholders and new investors to appreciate what we've been working on throughout the last several months. Please follow up with Laura Kiernan with questions you might have. We look forward to speaking with you again when we report our third quarter results in the fall. Until that time, stay safe.
spk00: Thank you. This does conclude today's conference call. You may now disconnect.
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