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spk00: Good morning and welcome to the Farmers Edge live audio webcast for its first quarter 2021 financial results and business highlights. Please be advised that reproduction of this audio webcast in whole or in part is not permitted without written authorization from the company. All lines have been placed on mute to prevent any background noise and after the speaker's remarks there will be a question and answer session. If you would like to ask a question during this time, simply press star and the number 1 on your telephone keypad. If you would like to withdraw your question, press star 2. Individuals will be limited to two questions each before being put back into the question queue. At this time, I would like to turn the call over to David Patrick, Chief Financial Officer of Farmer's Edge.
spk06: Thank you, Operator. Good morning, everyone. Before we start, we would like to remind you that all amounts discussed on this call are denominated in Canadian dollars unless otherwise indicated. Please note that the prepared remarks contain forward-looking information and additional forward-looking statements that may be made in response to your questions during the Q&A portion of the call. These statements reflect the company's current expectations regarding future events. Forward-looking info information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the company's control that could cause actual results and events to differ materially from those disclosed in or implied by such forward-looking information. Listeners are urged to consider the assumptions, risks, and uncertainties associated with such forward-looking information, including by referring to the assumptions, risks, and uncertainties discussed in the Farmers Edge filings with the Canadian Securities Administrators. These statements do not guarantee future performance and therefore undue reliance should not be placed upon them. The company does not undertake any obligation to update the forward-looking information provided during this audio webcast, whether as a result of new information, future events, or otherwise, except as may be required under applicable securities law. Finally, we would like to remind listeners that the company may refer to certain non-IFRS measures and key performance indicators or KPIs during this audio webcast, For further details on non-IFRS measures and KPIs, including relevant definitions and certain reconciliations, you can see the Farmers Edge filings with the Canadian Security Administrators. I now turn over the call to our Chairman, Bill McFarland, for opening remarks.
spk04: Good morning, everyone. It's a pleasure to be with you today on our first conference call. It's been about two months since we completed our successful initial public offering, and we are making progress. We know as a new public company, results matter, and building the confidence and trust of shareholders is critical. So how will we do that? By delivering on our vision and connecting the agriculture ecosystem through acre and revenue growth, by showing discipline and holding ourselves accountable, by being innovative with data insights, and by spending your money wisely. I am pleased to report that Q1 2021 was a solid start to our journey. We delivered more new acres than in any previous start to a calendar year with over 2 million high-quality new acres. This bodes well for future revenue growth. So looking ahead, I am confident that with the vision, expertise, and drive of our motivated senior leadership team and support of our major shareholder, Fairfax, that your company is positioned to create long-term shareholder value. I'll now turn the call over to Wade to discuss some important business developments.
spk01: Thank you, Bill, and good morning, everyone. We are pleased to be with you today to review the recent developments at Farmer's Edge, as well as our financial and operating results for the past three months ending March 31st. For today's call, I'm going to share a number of those developments with you. I'll hand the call over to David, who will discuss the financial results in detail for the reporting period. And then I will provide some remarks about where we believe the business is trending. It's only been about nine weeks since we completed our IPO, but I feel a lot has happened since then, both in our business and the broader agricultural sector. So what's new? Well, there's three key developments I'd like to discuss. The first one is the introduction of our canola heat blast yield protection product. As evidence of our ability to innovate towards the end of April, we launched the first of its kind canola heat blast protection product for our farmers as part of our growth plan in the digitalization of insurance and for the growth of our business analytics revenue. This digital product helps farmers protect substantial investments in their canola crop against potential extreme heat that could really reduce yields. This product is only available to growers who subscribe to the Farmers Edge Smart Solutions product. We're able to offer this product by leveraging our farm command technology that's been installed on the farm and by seamlessly relaying that data from our platform to our international insurance partner Munich Reef. This automated quoting capability for farmers in order to receive a quote is very innovative and new. It's that access to the data available through our platform and that seamless connectivity which allows Munich Re to provide automated quoting and offer this product to our Farmers Edge clients. We believe that this premium will cost the growers around $10 an acre and it will provide farmers with significant value when it comes to managing the inherent and increasing risk of weather patterns on their farms. Our heat blast product effectively digitalizes the flow of insurance data from start to finish, and it's just one of the examples of how we are positively impacting the ag industry. We are creating value for growers and to Munich Reef who are underwriting the product. These types of innovative products help us develop new revenue streams and will promote new growth in our subscribed acres. It also opens the door to more innovative insurance products in other markets and other crops. Our carbon program. Governments and regulatory bodies are increasingly focusing on carbon neutrality and the development of carbon credit markets here in Canada and in the United States, but also globally. Protecting our environment for future generation is one of the most important things that we can do. We are also pleased to report that we launched the details of our highly anticipated carbon program yesterday, which we believe will become a new revenue source for farmers and will provide the broader marketplace with a source of high quality carbon offsets. Growers have the ability to create carbon offsets by implementing new management practices such as nitrogen efficiency, conservation tillage, and cover crops. To capitalize on these opportunities, growers provide prospective carbon credit buyers with high-quality, verifiable data to validate their claims under the applicable carbon protocol. Our Farm Command platform, in particular our fertility products, provide the growers with the tools that they need to capture the required data in an automated format to qualify for these offsets under the protocols. It removes manual record keeping for growers and allows this data transfer right at their fingertips. We know that when farmers utilize their manual processes, it can take up to 60 hours of the grower's time in order to qualify for a protocol, and Farmer's Edge makes that seamless. From Farmer's Edge's perspective, we believe that this can become a significant source of revenue for us tied to the aggregation fees that we will charge growers as a percentage of the carbon credits that they generate. And it will positively impact the grower in their decision to buy our fertility platform services and convert their subscriptions to our top tier VR products. We have spoken to a number of growers that are large acres, and they are excited to sign up to the program. The carbon program should also incentivize many of our clients to convert their Progressive Farm free subscription to a paid-for commitment going forward. Our insurance update. As our U.S.-based insurance channel partners, Hudson Insurance Company and ProAg, got through their window of annual crop insurance applications by the end of March, we have seen these channel partners start to add acre volume to our progressive farmer program early in the second quarter, and we expect that to continue. As we further move into the summer season and into the crop insurance claim season, we expect them to utilize our smart reporting and smart claim via our platform in the coming months, which is connected with acres that they bring onto the platform. We believe that initiatives such as heat blast protection, the carbon program, and our relationships with our insurance, retail, and equipment partners will ultimately help our growth going forward by driving our key performance indicators, such as revenue growth, subscribed acres in the near and long term, and as Bill highlighted, we have added over 2 million acres in the first quarter, and that is something to really build on. Now, I'll hand it off to David. We'll talk about our KPIs in the first quarter, plus a series of other financial metrics that we hope will help you better understand our dynamic and our growing business.
spk06: Thanks, Wade. I'm pleased to report that our first quarter 2021 results showed strong year-over-year improvements and were generally in line with our internal forecast and comes on the heels of a predictably strong fourth quarter due to seasonal buying patterns. Since this is our first conference call, let me step back and briefly explain the seasonality impact on our business and the impact of our progressive grower program on revenue. Growers in North America typically subscribe in our digital products and services where revenue is earned throughout the year. Our fertility solutions, including smart VR and smart nutrient services, are an add-on to our digital products and are delivered in the fall and early winter months. So our fourth quarter will traditionally be our strongest quarter when the majority of the fertility services are performed and revenue is recognized. The remainder of these fertility services are generally completed in the first quarter following. We also had a significant portion of our 2020 Progressive Grower Program acres sign up in the second and third quarters of last year, representing over 4 million acres. The Progressive Grower Program provides the first year free and includes an opt-out clause at the first anniversary. As a result, the free year of digital products continued through the first quarter and these acres had no digital solution revenue in the current period. They will become revenue generating as the free period ends later in the second and third quarters of this year and as they convert to being paid acres. Our annual recurring revenue, KPI factor, It takes out these anomalies and provides a better gauge to measure future revenue potential as it ignores the first year free digital solution discount. In regards to revenue, our consolidated 2021 first quarter revenue of $9.9 million was 34% higher than the 2020 first quarter revenue of $7.4 million. The vast majority of the revenue for both periods being $8.9 million in Q1 2021 and $6.8 million in Q1 2020, was derived from our digital agronomy solutions. The increase in consolidated revenue in the current period versus Q1 2020 is largely attributable to the increase in digital agronomy acres over the comparative period and consistent with the trend late in 2020. As discussed above, the current period's revenue does not include any digital solution revenues for the 2020 Progressive Grower Program acres that are still in that first year free period. The first quarter 2021 revenue was lower compared to the fourth quarter of 2020 revenue because, as expected, commercial contract revenue of $5.7 million in Q420 was non-recurring and there was $2.8 million more fertility services revenue in Q420 due to the seasonality of our business discussed previously. We ended the first quarter of 2021 with 23.9 million subscribed acres. That's an increase of 43% compared to the end of the first quarter of 2020, and an increase of 5% compared to December 31st, 2020. In the current quarter, we added 2.1 million new acres, mostly in North America under the Progressive Grower Program, which is our premier go-to-market product. These additions were partially offset by 1.6 million in discontinued acres, The discontinued acres were mainly the result of the company removing 1 million promotional acres in Eastern Europe with some large corporate farms there, which were at the end of their contract period. These contracts historically only contributed approximately $150,000 of annualized revenue for the company. The choice to remove these acres is aligned with the company's strategy to focus on progressive grower plan and attract customers at a higher position on our digital platform. The company's annual recurring revenue, or ARR, as at March 31, 2021, was $56 million compared to $32.7 million as at March 31, 2020. This 72% increase from the comparable period reflects a combination of new digital agronomy acres signed since March 31, 2020, as well as new contracts signed under business analytic solutions, and is adjusted for foreign exchange rate differences at the respective measurement dates. Our Q1 2021 ARR increased 2.6 million or 5% from the end of 2020, despite being negatively impacted by approximately 0.7 million due to the strengthening of the Canadian dollar during the first quarter of 2021. As mentioned earlier, the first quarter is traditionally not our strongest selling quarter, so we were pleased with this start to the year. Subsequent to the end of Q1, Our new acre growth was strong in April, with approximately 1 million of new high-quality acres added, primarily under the Progressive Grower Program in North America. Our goal is to keep that momentum going for the rest of Q2 and Q3. Our adjusted gross loss for the first quarter of 2021 was 0.4 million, compared to an adjusted gross loss of 5.1 million in the comparative period of Q1 2020. That's an improvement of 92%. The company's improved Q1 results highlights our ability to scale by increasing revenue with only nominal increases in costs. The fourth quarter adjusted gross profit was approximately $7 million of 2020, and that was driven by higher revenues in that period, including $5.7 million of one-time commercial contract revenue and the higher portion of fertility services revenue delivered and recognized in that period, as I mentioned earlier. EBITDA loss for the first quarter of 2021 was 8.4 million. That's a reduction of 50% from 16.7 million in the comparative period. This came from growing revenues, the reduction of costs, including the decrease of the cost of satellite imagery by 3.8 million, or 70%, and realizing additional economies of scale. The company also reduced the net loss for the first quarter by 11.5 million, or 40%. And that's mainly coming from improved EBITDA but was also helped by foreign exchange gains, higher levels of government grant income, and lower financing costs. For similar reasons, negative free cash flow improved by 11.9 million, or 54% in the current period. The first quarter of 2021 included the continued free period for the 2020 Progressive Grower Acres, as I've mentioned, and the company is focused on converting those acres as their free periods end throughout this year. We believe our carbon program will not only assist in these conversions to paid, but also help upsell the acres to fertility products. This is a key focus for the company for the rest of the year. Early conversion trends from free to paid acres on 2020 progressive acres appear to be positive, and we're optimistic that those trends will continue. We have extended the conversion deadlines from free... to pay to more closely align with our carbon program rollout in order to incentivize our customers to convert. We remain confident that customers recognize the value that our digital solutions provide, which should support healthy conversion rates. We will provide updates on conversion rates as the year progresses. With respect to our balance sheet, we are in a strong financial position at the end of the quarter. After the successful completion of our IPO in March, the company had negligible debt, and more than $120 million cash on hand to fund organic and inorganic growth over the medium term. Overall, our first quarter 2020 results keep us on track to meet our medium-term goals communicated during our IPO in March and reaching 40 million subscribed acres, annualized revenue growth of 45% to 50%, improved EBITDA, and reaching break-even free cash flow over that medium term. With that, I'll turn the call back to Wade to provide some closing remarks.
spk01: Good. Thank you, David. It is an exciting time for Farmers Edge. We operate within a macro market that is feeling some positive effects from some tailwinds. For example, in recent weeks, we started seeing meaningful increases in commodity prices, such as canola, which is up around $15 to $16 a bushel. Consequently, our farming customers are beginning to realize better economics. Weather patterns in the regions where we operate, such as Australia, are becoming more favorable for growing after suffering drought conditions for several years. We also continue to see demand across the supply chain for sustainable solutions in the ag industry, which is right in our wheelhouse. All of these should expedite the buying decisions on services such as ours. We feel like we are just scratching the surface with our technology as well as the relationships and the insights which we can provide to the agricultural ecosystem. As an example, in April we entered a partnership with an agronomy consulting company where they committed to adding over 500,000 acres with their customers in the Progressive Farm Program. This client sees the benefits coming from our platform by getting access to the tools to better provide insights for the agronomy services they are providing to their growers. Our total addressable market comprised of Canada, the US, Brazil, Australia, and among other jurisdictions consists of nearly 2 billion acres of farming land that could benefit from our insights and our technology. In terms of how we will capture more of that market, our priorities include using our partnerships and sales force to drive acre adoption. primarily in North America through our Progressive Grower Program, building our business analytics products through innovation and new product rollouts, providing strong customer service, continuing to build on our operational execution capabilities using our enhanced brand and recognition as a new public company that is providing us with new opportunities. With respect to M&A, we are seeing interesting opportunities in the market. We will take a disciplined approach to M&A that is focused on driving growth and value to shareholders. As we look ahead to the coming quarters, we anticipate that our business will grow significantly, both in acres and revenue. We have momentum and expect strong acre growth in the second and third quarters. With that, we'll open up the lines for questions and included in the room with us is Anita Wortsman, the company's president. And I'll pass things back onto the operator for questions. Thank you very much.
spk00: Thank you. We will now begin the question and answer session. Individuals will be limited to two questions each before being put back into the queue. To join the question queue, you may press star then 1 on your telephone keypad. You will hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star, then two. The first question is from Richard C. from National Bank Financial. Please go ahead.
spk03: Hey, good morning, guys. Nice to see that year-over-year growth momentum. So on my two questions, the first one is, Could you maybe talk about what the collective value of free trial programs that were signed in 2020?
spk06: Sorry, say that again, Richard, I did the.
spk03: Yeah, yeah. Could you talk about what the potential collective value of the free trial program that was signed in 2020?
spk06: Oh, so like in essence, the acres that we added under our progressive grower program in 2020. So we would have had, as disclosed before, we had a little over 4 million added between Q2 and Q3. Those would be coming in at the smart solution product, which would be like a $3 product. And so those, as they're coming and turning into a paid acre, would have a multiple of that. Overall, for fiscal 2020, the total number of acres that we added under the elite or the progressive grower program was more like 6 million, but some of those came right at the end of the year. So in theory, they probably won't even turn within the end of the calendar 2021. And so we point to about 5 million of potential acres turning into paid acres. And again, if you have those at all, $3, that's that revenue potential from those free period.
spk03: Okay. And my second question has to do with sort of the linearity of the revenue for the remainder of the year. Do you think it's going to fall a similar path to what we saw in the prior year, but at a relatively higher annual run rate here going forward?
spk06: Yeah, like our Q4 will always be significantly the highest period, and that'll be because of mainly the fertility services that we provide. And so our revenue recognition criteria has that revenue be recognized and it's very high margin revenue when the fertility services provided to the grower. In this last kind of fertility season, as we estimated that we would have kind of a relatively balanced fertility season where you would have just as much fertility delivered in quarter four as we did in quarter one. That was taking a few different assumptions or factors into consideration to make that. But in theory, what we saw was a much heavier balance of the fertility season services provided and the product mix of those services provided in quarter four. And instead of being kind of balanced 50-50, what happened, there was about 80% delivered and therefore revenue recognized in quarter four versus 20% of the fertility season revenues in quarter one. That came to realization as we closed off the year-end results post-IPO, but that is a big factor, and we see something similar to that on a go-forward basis, too, where we're probably thinking it's going to be a higher delivery rate of fertility services in quarter four versus the following first quarter, but there are some seasonal impacts with that. Business analytics solutions will also have some kind of later year momentum probably to the degree that where you can kind of look at as those acres are being added by our insurance partners and so therefore we're getting smart claims, smart reporting type business analytics revenues from those but also tied to the carbon side so there's going to be kind of a carbon aggregation fee that we'll collect And we anticipate that some of those higher carbon revenues will come as that program is being delivered kind of in the back half of the year, closer to the fertility seasons as well, just because of some of the details of the carbon program being tied to the fertility delivery. Okay, that's great.
spk03: I'll get back to you.
spk00: The next question is from Jacob Bout from CIBC. Please go ahead.
spk02: Good morning. Good morning. First question is just the growth you're seeing by geography in subscribed acres. Is Canada leading the U.S., and how does that compare to the rest of the world?
spk01: Yeah, so Canada continues to deliver acres, and we're excited by that. A lot of it built on the back of that strong partnership with Richardson's. But we are seeing... growth starting to happen in the U.S. built on this channel strategy that we've built up with insurance and we've got some really strong C&H dealerships that are really starting to put a lot of acres on as well. So Canada still kind of leads but the U.S. is picking up a lot of momentum and we're actually seeing some nice growth out of Australia now as well since they've had some really favorable conditions and And we're getting some strong momentum built up in Brazil as well.
spk02: What is that split right now?
spk01: The split, well, Canada leaked away, David. Do you have the, yeah.
spk06: Yeah, if you look at the acres that were added in quarter one, Jacob, like tacking it on to kind of the allocations that we talked through at year end. But in essence, the kind of 2.1 million new acres that we added in quarter one The vast majority of those would have been North America, and the split between North America probably would have been pretty balanced, 50-50, with a slight edge to Canada over the U.S. What we're seeing in April, though, and early quarter two, is really much heavier to the U.S., and then followed by Canada, and also followed by Australia, as Wade mentioned.
spk02: And then my second question is just about margin compression and how concerned you are about that because you know when we take a look at you know obviously there's a land grab going on right now for digital acres very competitive but it seems like the majority of the competitors now are you know focusing in on a more of a tide selling approach and So how concerned are you about this, and what are you doing right now to protect yourself against this?
spk01: Look, you're always concerned when your competitors are giving products away for free. But what we've been able to do is focus around the ecosystem. And so the two critical components that we've launched is the new insurance program. And so farmers have to be on the Farmer's Edge platform in order to get heat blast insurance. And that That's being received really strongly on the farm, this extra risk management. And so we see that as something that our competitors can't really offer. And the second part is around the carbon opportunity. We see ourselves as a leader in this space. Our digital platform is going to make this really easy for farmers to be able to access these credits. And these credits will add a lot of value And so we don't, and again, our competitors out there, they really can't play in this space, specifically when it comes to the fertility side of things. So we actually think that's going to help our margins because the growers are going to, there's going to be a significant amount of value for them at the end of the season. So, you know, again, we think it's going to drive acres, it's going to drive conversions and put us in a real competitive position.
spk02: Thank you.
spk00: The next question is from Doug Taylor from Canaccord Genuity. Please go ahead.
spk05: Thank you. Good morning. You mentioned some extension of conversion deadlines for the progressive grower program. Can you just explain a little more? the motivation behind that. And just generally, I'd love to just discuss the visibility that you have in advance of those conversion deadlines. I mean, do you feel like you've had conversations with these customers? Do they give you indications well in advance? I think anything you could provide to help us understand the degree and gain a degree of comfort with the conversions would be helpful.
spk01: Yeah, some of the idea around the conversion deadline extension is connected to the carbon program so a critical component of the carbon program is linked to fertility and so with some of the growers their timeline to sign up was kind of in the middle of planting and seeding so we've extended that to let them get their seeding and planting done and then we knew that with the carbon program rolling out we wanted to bring that out to them so that they could better understand what the opportunity was. We've also talked to some large farmers and gave them a view of what the carbon program was going to be, and we've got some really strong uptake early on. So we're expecting this carbon program to really drive that conversion. But to be honest with you, a lot of the conversions are coming I would say in early June and going forward from there, a lot of the C&H elite program was signed in the middle of summer. So early indications, we feel really confident the conversion number is going to be solid.
spk05: And that extending of the conversion deadlines in some cases, would that in any way impact the revenue then that we should anticipate from those programs?
spk06: Again, if we're only talking about weeks or a handful of weeks, Doug, I would say nothing material. We're not talking about extending it months or quarters to have any material impact, so I Yes, in theory, there could be some exposure there, but nothing that I think would be impactful to any significant degree.
spk05: That's helpful. You mentioned, obviously, the decision to roll off some acreage in Eastern Europe, which had been heavily subsidized. I guess the broader question is, is there a significant amount of that type of acreage remaining in your subscribed acres that this might become, you know, that might follow suit in future periods?
spk06: We'll consider that. To say that, like, especially in some of those kind of emerging markets, and Brazil would be one, where we didn't have progressive grower. We've had to use kind of this other strategy where we kind of try to kind of get growers connected. And, again, a lot of those international countries have more corporate farms And so they kind of are looking towards a very low cost platform component. And so we start them at the very bottom of the ladder in a promotional price with the hopes of bringing them up. We're seeing the benefits of our progressive grower program. And so it's probably more of let's try it at that. And what that does is it allows them to call it experience a better product, right? They're coming in at that middle of the platform. fully connected, putting can plugs and machinery and so forth, and it just gives us a better chance to show off the platform versus starting them at the very bottom of the platform. So do we have some promotional acres in other jurisdictions still? Yes, and that's just because of the lack of progressive grower, but we're taking that into consideration as we look at what the best approach is Again, if the success of the Progressive Grower Program continues to show benefits here in North America, then we'll roll that out similarly in some of those international markets. You could see either some swaps of some acres coming in or out, or again, acre growth because we're taking on more.
spk01: I might add to that. The strategy around the connected farm is really where a lot of the value gets added. In the markets like Brazil, we see huge opportunities around the ag lending and the insurance space, and that only happens if the farm is connected. And so as our strategies with our insurance providers start to mature, the focus on connected farm becomes even stronger. So I think, as David said, in the early stages, we used some of those imagery promotional offers to attract the farmers in. Our view is now that the platform is robust and strong enough, and the real value proposition of the grower is through some of these other auxiliary services. So our focus now is really around connected farm and the ecosystem, and we don't really foresee the need to utilize some low-cost imagery to attract farmers anymore.
spk05: Okay, and maybe one more kind of bigger picture question for me here is, I mean, if we look past the seasonality, and obviously we've got to calibrate our models a little bit better for that, but in the currency and some of these one-time impacts, is there anything about the way that this year is setting up that suggests that the 45% to 50% overall growth target that you kind of laid out for yourselves isn't achievable in 2021?
spk06: No, like the biggest momentum and factor there is this conversion of those multi-million lead acres from last year. That'll have huge benefits for us. And then you tack on kind of the hopefully upsell tied to carbon and insurance product offerings like we've highlighted. So if those come to fruition as we see those happen over the summer, and we'll call it HAB, statistics and better retention, conversion, upsell rates, statistics for this call and our reporting as we enter into those big acre kind of periods, I think that'll give a much better, clearer, but we are back-end heavy. We are that because of the natural seasonality of fertility, but also some of these new products and so forth really taking off, and so If we get the successes from the insurance products such as our canola heat blast or even our carbon contributing improvements, we should be able to still exceed that kind of growth and reach those year-over-year levels that you highlighted that we have for the medium-term targets.
spk01: I might just add a couple of things to that. For us, around our growth really comes from the impact of the conversions. Once we get a farm on Progressive Farmer, when we get those guys converted into those higher value products. One, I think our channel partners are maturing. One thing that we're seeing is a much better customer selection that's coming through the Progressive Farm. Our customer success people are really excited about the quality of the growers and the engagement. That's a key indicator for us of conversions. But probably the most important part is to think about the carbon side of things. With our customers, as they move into the Smart VR program, the carbon is essentially going to pay for the entire product and even put some money into the farmer's pocket. And we see that as a significant move for conversion. And so as we only think that that's going to strengthen, it's going to not only help with conversion, it's going to help attract new acres throughout the summer and into the fall.
spk00: The next question is from Steve Hansen from Raymond James. Please go ahead.
spk07: Yeah, good morning, guys. Just a couple for me. It was mentioned, Wade or Dave, that you've entered into a partnership with an agronomy services group and there was an associated commitment for 500,000 acres. Is that a start of something more broad that we should see that strategy around partnering with some of these larger agronomy groups now?
spk01: Yeah, for sure. I mean, I think In the early years of Farmer's Edge, a lot of these agronomy groups saw us as a competitor, and so they were somewhat standoffish, but the platform has become so strong on the agronomy side. It enables agronomists to really scale their businesses, and it actually allows them to connect to the customer. So once people trial it, and the interesting part, the progressive farm is an opportunity for us to get customers on that are generally connected to agronomy companies. And so they kind of get pulled into it. So we see this not only for agronomy companies, Steve, but also for retail. The retail agronomy groups also are starting to get more comfortable with the platform as well.
spk07: Okay, great. And then just if I could dovetail on the same line of thinking, you had also mentioned you're looking at M&A opportunities. So just trying to understand... whether that's going to entail specific capabilities that you're going to add on the tech stack, or if you'd be looking at some sort of extension into sort of the customer base, like an agronomist type entity, just trying to understand where you're targeting your approach there.
spk01: Yeah, I mean, there's opportunities across the space. I mean, the ag technology component is that there's lots of companies out there that have sort of one SKU, And there's always this battle to get scale. And for us, you know, we're not good at everything. And so if we can find an opportunity that makes sense to tuck in, that opens up more acres. And our focus is always going to be on, you know, if we acquire something, how does it open the door to more acreage and how does it add more value when it comes to the other verticals? And also, I mean, you know, there is opportunities around, I would say, the consulting space, but it has to really make sense to us, and there has to be, again, a focus around how those acres can convert into a digital acre and add value. So we're looking at it. There's probably more opportunities than I would have thought of before the IPO, but we're being disciplined and being thoughtful around it.
spk07: That's great. And just one last follow-up, if I may, is can you just maybe speak to how the new insurance product is actually being marketed to the customer base? Is it the agronomists that are assigned to the individual accounts that are making those calls, or is it reps of Munich Re? I'm just trying to understand. It's a brand-new product that you're selling, and it's just not your traditional – that's not what they're typically responsible for. I'm trying to understand how that's actually getting to customers, how you're making sure the conversion or how it's happening in the sale process.
spk01: No, it's a great question. It is sort of, you know, the idea of the disruption in the space. So, you know, one of the things that we're able to do is Munich is able to provide quotes for every one of our clients based on their cropping plant, and it's automated. And so right now, farmers are receiving quotes on their canola product, and then our customer success managers, they follow up with the customer and get, you know, their feedback. And And so we're going to be able to touch millions of acres with this coating engine very quickly without any real boots on the ground from an insurance company. And so Munich's quite excited about that. We also tested some other concepts as well through our cropping plant, and it worked well. So I think canola heat blast is the first one, but there's going to be other ones coming in the future. And I would say that we're excited, but The Munich's even more excited about this than we are so This concludes the question-and-answer session I would like to turn the conference back over to Wade Barnes for any closing remarks Great well, thank you very much everybody and I very appreciate the time to be able to tell you about the business and how we're progressing and look forward to to keeping in touch with you here and to the next call to be able to showcase our success. So thank you very much.
spk00: This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.
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