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spk07: Good morning, everyone, and welcome to Q4's fourth quarter 2021 earnings call. My name is Sarah Pearson, and I'm Q4's Director of Investor Relations. And I'm joined this morning with Daryl Heaps, our CEO, and Ryan Levenberg, our CFO, to review our fourth quarter and full year results. Please note, a copy of today's presentation will be available on our website. Following the prepared remarks, we will be looking forward to welcoming our research analysts on the call for a live Q&A session. To those in our virtual audience, you can use the webcasting Q&A button to submit questions in real time. We need to remind participants that certain information discussed on today's call may be forward-looking in nature. Such forward-looking information reflects the company's views with respect to the future events. Any such information is subject to risks, uncertainty, and assumptions that could cause actual results to differ materially from those projected in the forward-looking statements. For more information on the assumptions related to the forward-looking statements, please refer to Q4's public filings available on CDAR. During the call, we will be referencing certain non-IFRS financial measures. Although we believe these measures provide useful supplemental information about our financial performance, they are not recognized measures and do not have standardized use under IFRS. Please see our MD&A for additional information regarding our non-IFRS financial measures, including for reconciliation to the nearest IFRS measure. Please note that unless otherwise stated, all references to any financial figures are in U.S. dollars. With all that out of the way, I will pass it over to our CEO, Daryl Heaps. Daryl?
spk04: Thanks, Sarah. And good morning, everyone. Before getting into our 2021 annual and fourth quarter results, I wanted to take a brief moment to talk about our mission at Q4 and becoming the largest capital markets communication platform in the world. The way to think about our business is that we sit at the intersection between corporates, the sell side and the buy side. We focused our initial business on the corporate side, specifically the investor relations workflows required for our corporate clients. In 2021, we began expanding into the sell side, specifically helping corporate access teams produce a wide range of investor events from bus tours to large conferences. As we move forward, we are going to continue to expand our platform to serve all of the critical workflow and data needs for each of the three sides of the market. On a related note, today you are experiencing our new Q4 earnings platform, which incorporates live and prerecorded video, all captured using Zoom, along with interactive audience questions. As well, joining us shortly on the platform will be a few of our covering analysts asking their questions. It's going to be a great session, so let's get started. Overall, 2021 was another exciting year in terms of the progress we were able to make against our strategy and the milestones we achieved. Specifically, we are thrilled with posting an annual growth rate of 37% for 2021, exceeding our expectations of 30% organic growth that we have set for ourselves. We also exited the year with a fourth quarter gross margin at just under 60%. I'll let Ryan speak to the details on this. However, the point that I wanted to make is that our focus on delivering both sustained growth and margin expansion are the two key elements to our path to profitability and free cash flow generation in 2023. During the year, we also experienced some incredible client growth, ending with 2,656 clients, with 612 new clients added in 21. This growth was driven largely by new logo acquisitions throughout the year, combined with strong renewal rates across the client base. Platform adoption and ARPA also continue to grow as a result of delivering our innovative platform products, along with strong upselling and cross-selling across the business. Finally, this year, we're also really pleased to deliver strong and consistent growth outside of the U.S., primarily in Europe. International expansion is an important component to our growth as we execute against our large and global TAM. From a product perspective, the vertical integration of our events business continues to be one of the key drivers of both our product innovation and gross margin expansion. During the quarter, we continued the rollout of our new corporate earnings platform, delivering over 600 earnings events to date. In December, we released the latest version of our capital markets events platform with an expanded set of functionality designed to support online, hybrid, and in-person investor events for our sell-side customers. We also saw continued success of our new ESG website product, launched in the third quarter. As we all know, ESG is changing the corporate reporting landscape, and we feel this is an important new segment for us to bring new and innovative products. Keep an eye out here for, on this front, more to come. Finally, during the year, we made significant progress on a number of key data initiatives that have really laid the foundation for new platform releases to come in 2022. We're thrilled to have this work now done and looking forward to some excited launches over the coming quarters. A few of the notable points about the quarter. We are pleased to welcome Julie Silcock as our newest board member. Julie is currently a senior advisor at CDX Advisors, and brings 35 years of capital markets and M&A experience with previous senior roles at Houlihan, Loki and Citigroup. As well, we would like to thank Colleen Johnston for accepting the role as our board chair. We are proud to be at the forefront of board diversity best practices as we are one of only a handful of newly listed companies on the TSX with women on our board and as our chair. On the awards front, Q4 was also named Best Places to Work, Best Places to Work for Diversity, and was awarded the Deloitte Fast 50 and Fast Enterprise 15 award categories. The impact of rising rates, inflation, and the war in Ukraine has caused significant market volatility. I want to share that we are not tone deaf to investors' current preferences for short-term profitability over growth. However, we remain steadfastly committed to the strategy we outlined during our IPO and the business we are building for the long term. We are well capitalized, very well positioned, and have a massive market ahead of us to grow into for many years. We are committed to our investments in sales, marketing, and R&D to help drive our growth, scale, and product innovation. We remain focused on creating long-term value for our shareholders by delivering strong organic growth, strategic M&A, and positive free cash flow in 2023. In terms of acquisitions, with private market valuations coming down, We believe we are really well positioned with a strong balance sheet to execute on this part of our strategy and look forward to announcing deals over the coming quarters. Before passing to Ryan to take us through the details of the quarter, I wanted to end with a couple of comments on the dynamics of our market and the macro trends driving demand. There are four main drivers of demand. The first is the simple fact that at the core of the market is the consistent and durable demand for investors and companies to engage with one another. No matter what the market conditions are, bull or bear, this core demand remains strong. We saw this through the 2008 financial crisis, through COVID, and through recent market dynamics. Today, there are over 40,000 public companies globally, of which 6% are our clients, creating a large and durable TAM for us to grow into for many years. The second is the changing economics of the sell side and how they service their clients, the buy side, and corporates. Over the last 10 years or so, we have seen the compression of trading commissions and the impact they have had on research and corporate access service levels. MiFID II impacted this further. This caused corporates and the buy side to become much more proactive in the market, driving needs for the tools that we provide. And during this time, banks also needed to find new ways to be more efficient in delivering their services. This set up the perfect storm for the third driver as we entered into this incredible pivot to virtual and digital that occurred over the last two years. This new way of working has become a necessity for all and has enabled banks to actually become much more efficient in serving their clients and corporates, expanding their reach and levels of engagement. We saw this happen early in 2020, and we can now see how much of a rewiring has occurred. The efficiency and reach of digital is undeniable and will remain a key driver of demand for years to come. The fourth driver is that in this new digital world, the need for data-driven decision-making has never been greater. With everything online and there's just so much data available, it is critical to use analytics to identify and prioritize the best opportunities in the market. And what we know very well is that in a data-driven world, platforms win. They win because they are able to understand the behavior of all participants across the platform at a very deep level and use this along with machine learning to deliver highly valuable insights to all stakeholders. With almost 2,700 corporates and over 13 million investors coming through our platform each month, we are uniquely positioned to deliver our powerful insights to all of our clients across the market. Combined, these demand drivers and market dynamics create tailwinds that we believe will drive this business forward for many years to come. And with that, I'll now pass it over to Ryan to take us through the quarter. Ryan?
spk02: Thanks, Daryl, and good morning to everyone. Thanks for taking the time to be with us on today's fourth quarter earnings call. As Daryl alluded to, we're pleased with our fourth quarter and annual results and their contribution to our overall strategy and vision. Revenue for the fourth quarter was $13.8 million, growing by 24% from the year-ago period, exceeding our expectations. That performance was driven by strength in both capital markets platform, growing by 21%, and by platform services, which grew by 73%, both on a year-over-year basis. In 2021, 83% of our capital markets platform revenue was subscription revenue based on long-term contracts, which results in high predictability and supported by an attractive margin profile. We saw continued progress in growing our top line this quarter. The strategy to acquire and onboard new customers, up and cross-sell existing clients, and deliver rich capital markets experiences to investors, banks, and management is proving out. At the end of the fourth quarter, ARR was $51.9 million, a 21.8% increase over this time last year. This increase was supported by adding a significant number of net new subscription platform customers, increasing the adoption of multiple products, and driving overall customer retention levels. Complementing the above, at the end of the fourth quarter, average revenue per account was 18,144, a 2.8% increase over this time last year. To dive deeper into this metric, ARPA that excludes our SPAC and IPO customers increased at 10% on a year-over-year basis. This is helpful to measure our upsell traction, given that our SPAC and IPO program is typically dilutive to ARPA in the early years, but accretive to ARPA once they roll off the program. During the quarter, we brought on 123 new platform customers and 612 over the course of 2021. I'm pleased by the additional logos onboarded in our core markets and continue to be encouraged by our sell-side investment banking clients who continue to return to our capital markets events business for their virtual and hybrid investor conferences and bus tours. While attracting new customers across all segments is important, keeping them is even more so. Our strong commitment to exceptional customer service ensures that we focus on what is most important, taking care of the client. Our continued ability to retain customers is evidenced by the 95% controllable logo retention over the last 12 months. With a high retention rate, an increasing ARPA, and an expanding customer base, we are well positioned for future growth. As Daryl mentioned earlier, one of the key financial measures we focus on is gross margin expansion. In Q4 2021, gross margins expanded by 768 basis points to 59.6% as compared to Q4 2020. The progress made was driven by key cost initiatives in our virtual event segment, pricing initiatives, as well as leverage on our fixed cost base. As we have stated before, there are three things that will help us drive continued gross margin expansion. The first is shifting our underlying data feeds that power our products from a per-seat cost structure to one that offers Q4 fixed cost structure. The second is through the vertical integration of our virtual events platform, reducing our reliance on third-party vendors. And the third are the investments we are making in automation to optimize for scale across all of our product lines, which we expect to drive improvement over the upcoming quarters. In the fourth quarter operating expenses excluding depreciation and amortization, foreign exchange loss and other expenses total $12.3 million. Sales and marketing total 4.6 million or 33.5% of revenue coming in slightly lower than expected. Key areas of investments included growth of our direct teams, both in North America and in Europe, as well as a new dedicated customer growth team to drive up and cross sell opportunities. We plan to continue our investments in sales and marketing throughout 2022. Research and development came in at 2.8 million, or 20.7% of revenue, and G&A came in at 4.8 million, or 35.1% of revenue. Research and development came in slightly lower than anticipated, driven in part by the timing of additional headcount, whereas G&A came in slightly higher than anticipated as a result of costs associated with being a public company. And our adjusted EBITDA was negative 3.4 million or 24.4% of revenue for the quarter, achieving improved leverage as compared to the prior 2020 period adjusted EBITDA loss of 3.5 million or 31.9% of revenue. This is further evidence of our margin expansion strategy, a key component of our path to profitability. Our core working capital metrics remain strong and consistent with historical trends, ending with a working capital balance of 56.1 million. As of December 31st, 2021, we had $63.3 million in cash. Our operating cash flow for the fourth quarter was negative $4.9 million, driven primarily by the investments made across sales, marketing, and R&D. Our primary source of cash was from financing activities with proceeds from our IPO of $100 million Canadian dollars. As of December 31st, we had no outstanding debt with a total revolving facility size of $22.5 million. Our balance sheet continues to be well positioned to execute against both our organic and inorganic growth opportunities. Our long-term strategy is playing out as we expect it to, driving revenue growth and attractive margin expansion, which will ultimately deliver positive free cash flow in late 2023. To help you model out the coming quarters, here's how we think about the timing of investments and the benefit of key initiatives that should impact revenue growth and margin expansion. As revenue growth continues to be a key priority, we are seeing great traction on a number of organic strategic initiatives, including growth in our sell-side capital markets events business, geographic expansion, and new product launches. We would expect these initiatives to contribute financially in a meaningful way beginning in the second half of the coming year. We continue to expect to exit 2022 with gross margins in the mid to high 60s. Due to PASICOM investments, you can anticipate some variability in near-term quarters, with greater margin expansion in the second half of the year. Finally, with respect to M&A, we remain committed to executing on our acquisition strategy. We maintain a deep pipeline of active targets and feel that we are very well positioned to take advantage of market conditions. We look forward to updating you further in upcoming quarters. Overall, our financial performance for the quarter and the year provide us a strong foundation to execute in 2022, and I'm excited to report back to you on our progress in the coming quarters. That concludes my prepared remarks, so I'll hand it back to you, Daryl.
spk04: Great. Thanks, Ryan. To wrap up, before we go to questions, I wanted to close with a few quick comments. We are really pleased with the fourth quarter results, and we remain confident in our strategy and feel really good about our ability to execute in 2022. The demand for our platform remains strong in all market conditions, and we are committed to delivering organic and inorganic growth and profitability over the coming quarters. Finally, I wanted to invite our audience to attend an upcoming fireside chat on International Women's Day, March 8th, where we'll be speaking with our board members, Colleen Johnson and Julie Silcock, on stakeholder management and the role of the board in uncertain times. And with that, we'll now take some questions.
spk07: For our audience, we'll now be switching over to a live video Q&A feed. Give us a second to make that change. In the meantime, feel free to submit questions via the webcast Q&A submission button.
spk08: Thank you.
spk07: Welcome back, everyone. As you may have noticed, we utilized a prerecord of our prepared remarks today, something many of our customers leverage from our services. To start things off, we will be taking questions from our live research analyst audience, and then based on availability, we will take a few submitted questions from the webcast. With that, our first question comes in from Kevin McVeigh at Credit Suisse.
spk00: We're effective. Hey, Daryl and Ryan, can you help us frame out 2022 a little bit more in terms of how you're thinking about potential revenue growth and any puts and takes as it relates to M&A?
spk04: Sure. Thanks, Kevin. And thanks for joining us on the call today. It's nice to see you. So maybe I'll start with kind of overall and then I can pass to Ryan for a little bit more detail. But I think when we look at 22 overall. The kind of key thing, and it was mentioned in the prepared remarks, is that we see an ongoing and increasing demand for what it is that we're doing. As we've broadened out our product offering, we increased the number of kind of touch points that we can solve in terms of pain points with our clients, both in terms of our corporate clients and our sell-side clients. So we see demand remains really strong. So when we look at kind of overall, if you look kind of historically and going forward, we really focus on this kind of 30% organic growth. But even more so, we really focus on, if you look at our CAGR over the last five years, and that 50% growth in terms of both the organic growth and acquisitions. So I think that's still very much exactly what it is that we're focused on for 22 and beyond, and something that we feel really good about. From an acquisition perspective, I think the one thing I wanted to mention is, Our position in the market, again, from a platform perspective, gives us a really great opportunity in terms of acquiring point solutions in the market. And with the overall market dynamics in terms of valuations coming down, we're seeing this hit the private markets. And so that's also teeing up and making it an actually a more attractive market for us from an acquisition perspective. So we've been really developing our pipeline. We've got a number of great targets. that we are engaged with and we're really looking forward to bringing some exciting deals to market over the coming quarters. But maybe on that note, Ryan, do you want to add any additional color there?
spk02: I think the only additional points there, Kevin, is just really related to the organic strategic initiatives that we're very much focused on and forecasted that they're going to be contributing financially in a meaningful way, right? That's really our sell side capital markets events business, further geographic expansion, and then new product launches. So I think Daryl's framing of that 30% organic growth is something that we really think about a lot combined with, you know, the last couple of years, if you look at our CAGR closer to 50% augmented by M&A is something that we absolutely are thinking about for the rest of the year as well.
spk00: It seems, and I'll end with this, Daryl, that the M&A environment is probably much more favorable for you even relative to six months ago. It seems like it'll be a fantastic outcome.
spk04: Absolutely. I mean, from six months ago to today, we all know what's happened with valuations. So that's playing into our strategy quite well, considering the strength of our balance sheet and the dry powder that we have available to us to execute on acquisitions. Congratulations again.
spk08: Great. Thank you so much, Kevin.
spk07: And with that, our next question will come in from Richard T. at National Bank.
spk05: Hey, thank you. Hopefully you guys can hear me. Yeah. OK, great. So just curious to see if you can maybe comment on a. changes in the cadence of the business with, you know, obviously a lot of reopenings happening now in the market, people are getting back in the office and then live events are happening. So has that kind of changed anything in regards to your business? My guess is that, you know, given your offerings that have hybrid solutions, it might actually even be incremental to the business, but just kind of want to get a bit of a color on that.
spk04: Yeah, that's a great question. Thanks for that, Richard. And thanks for joining us on the call today. So the absolutely seen, and it's a good news story in terms of COVID kind of moving to the in terms of in-person meetings again. And we certainly see that as people are going back to work, that it's adding that dynamic. The important thing to understand about our events business is that the vast majority of it comes from events that have always been and will always be virtual. A great example is where we are today on this earnings call. And if you look at the thousands and thousands of earnings calls that we do each year, all of those have always been virtual and will continue to be so. Similarly, with other events like investor days or ESG days or analyst days, et cetera, the kind of the ongoing adoption was pre-COVID continues to be after that these events will all be virtual. And this is the vast majority of our virtual events business. In terms of what it is that we're doing with the sell side, investor conferences, bus tours, et cetera, your point around hybrid is really accurate, is that the reality is that virtual has brought such a degree of efficiency and reach to these events, these investor events, that our customers are really looking at ways to continue to have that kind of overall impact in terms of their ability to service all their clients and corporates. So we see an ongoing and consistent demand. Now, having said that, you know, there are large events that will, you know, move back to in-person, have a big in-person component, but the vast majority, kind of the meat of the market, we see continued strong and increasing demand for virtual and hybrid event solutions.
spk05: Okay, great. If I could just slip one more in, if that's okay. It's more of a financial question, is that As we do get back more into the workplace, how does that sort of impact your kind of cost structure here going forward with people getting on the road more? And is that sort of baked into your assumptions that you talked about earlier, Ryan, in terms of the trajectory of margins in the second half of this year?
spk02: It's absolutely baked in, Richard. We've been sort of always thinking that we're going to be getting back on the road, specifically in the core folks that sort of traveled a bunch pre-pandemic as well. And so, yeah, it's fair to think that we have baked that in. We've sort of moved to also like a digital first structure. So our real estate plan will also be changing over the next couple of years. But again, all those assumptions are fully baked into our forecast.
spk08: Okay, I appreciate that. Thank you, guys. Great.
spk07: Next question is from Scott Fletcher at CIBC.
spk03: Hey, good morning, guys. Morning. Hey, good morning, Scott. I wanted to ask a question about the IPO and SPAC markets in 2022. Clearly, we're seeing some challenges in the equity markets and we're likely to see a slowdown in both of those areas. Just hoping you guys can speak to the impact that you think that'll have on your business and maybe specifically in respect to the growth targets that you have.
spk04: Sure. Maybe I'll take that on the front end. And then, Ryan, maybe you can take the additional aspect in terms of margins and perhaps also in regards to ARPA. But I think the thing to understand is that the IPO and SPAC market has certainly gone through a historically – great couple of years, 20 and 21 were very strong in terms of total number of customers that we acquired through IPO and SPAC channels. The thing to understand is that when we bring on a new IPO client, because of the kind of the subsidies related to the exchanges, the revenue associated to those is really significantly smaller than when we acquire a new customer out in the market. And so although the hot kind of IPO SPAC market is very good from a logo acquisition perspective, the actual revenue impact comes in the year three and four of those clients. So we think that there is a great opportunity for us in terms of servicing all the customers that have come on during this kind of hot IPO period. But really, its impact from a revenue and growth perspective is something that will only help us in the coming years. A zoom out as well is that if you look at our overall performance over a long term period, and we've gone through cycles of very strong IPO markets and very soft markets. we're still able to drive continuous growth through those periods. And the dynamic I mentioned is a part of that. But again, really the key thing for us is that the demand that drives this business comes from the fact that companies and investors are always needing to engage with one another, no matter what the market conditions, kind of good, bad, it doesn't matter. As long as the market is functioning, those two sides need to interact and our solutions fill that gap. But maybe on that note, Ryan, if you could chat about kind of margin impact and maybe ARPA, that would be great.
spk02: Yeah, absolutely. I mean, Scott, your point is absolutely accurate, right? It's been phenomenal to see those logos join the platform. And we're certainly happy to onboard SPAC and IPO customers on a little bit of a lower average revenue per account in the early years of their contract. And it can range from kind of two to four years. And the reason for that is that we also have those folks contracted to roll up at a much higher ARPA, even higher than our consolidated ARPA today. And so we are happy to take that sort of a hit up front in order to be able to bring that customer on the platform and start up and cross-selling them over the next couple of years. The thing with those customers, and I called it out in the prepared remarks, is that if you actually back out SPAC and IPO customers, you can see that instead of our ARPA growing at just under 3%, actually grew 10%. And so I think that signal is just showing that our organic customers or non-IPO SPAC customers are taking up more products and those customers are coming at higher ACVs than SPAC and IPO customers. So overall, something that is super exciting for us and we're happy to ride the wave because long-term, those customers absolutely become highly profitable for us.
spk03: I think that's a very helpful piece of context on the X-ing out of the impact on the ARPA there. Maybe just a quick follow-up. I'm curious, when those customers roll off, historically, have you seen that 10% ACV lift or ARPA lift on those SPAC and IPOs once you start to be able to upsell them after they roll off the initial contract?
spk02: they're coming off their contract at somewhere between kind of like four to 6,000 higher than our budget today. And so, you know, that just from fully what is contracted in terms of what they roll off in terms of like a website or a webcasting offering. But that actually doesn't include any of the other product that we would have upsold them along the way. So other types of events, CRM, analytics products, et cetera. So in all likelihood, those customers are closer to kind of 30,000 once they're kind of fully rolling off their initial contract with us. Okay. Thanks a lot.
spk08: Thanks, Scott. Great. Thanks, Scott.
spk07: Next question comes in from Doug Taylor at Canaccord.
spk06: Yeah, thank you. And good morning. Hopefully you can hear me. I believe you previously referred to having optionality on profitability and free cash flow in 2023, and now you seem to be signaling in your prepared remarks the expected generate free cash flow exiting 2023. Does that signal some refinement in your thinking about balancing the growth versus investment to optimize for profitability sooner than you might have expected before?
spk04: Thanks, Doug. And maybe I'll take that on the front end again here, Ryan, and then you can kind of perhaps if you can add some additional details there. Doug, I'll just start with, you know, as we mentioned in the prepared remarks that we're certainly not, you know, tone deaf to the shift in preference to short term profitability over growth in the current environment. To answer your question, when we're looking at that free cash flow in 2023, that has always been our plan. In the forecast period, we saw profitability coming in 2024, but free cash flow comes ahead of profitability. But I wanted to maybe just answer it in a slightly different way. in terms of when we look at what it is that we're building here is that we are steadfastly committed to the investments that we've been making because we see a much larger business ahead. And that's really what we're continuing to invest and grow into. If you look at the spend that we're making in terms of driving from sales and marketing and from R&D, these are really critical in terms of us executing on our strategy and being able to like over the next couple of years, building a materially larger business with these kind of mid 70s gross margin profile. When you look at that and you think about kind of an organic 30 percent growth over the next couple of years, as well as adding acquisitions on top of that, you can see a business that is materially larger than where we are today and delivering 75 percent gross margins. And we're really thrilled with the margin expansion that we've been able to to achieve. Delivering that 75 percent gross margin delivers a huge amount of gross profit. At that point, we see the ability to really drive a fantastic profitable business. And that's really what we're focused on is making these investments, getting to that level, and then driving that significant profitability in kind of free cash flow in 23 and then profitability to come after that in 24. Ryan, is there anything in addition?
spk02: I think you did a good job there covering all of our key points there, Darrell. All right. Okay. Thanks, Ryan.
spk06: Let me ask then a follow-up on an earlier question. You've spoken and you've reiterated your intention to use M&A to supplement your organic growth here this year. I think we can all agree it's become a bit more of a buyer's market. It's also a different market from a capital availability standpoint. Cash is certainly become more precious. So can you speak to whether your planned funding model for your M&A program might have evolved here in the last six months?
spk04: Sure. Ryan, why don't I pass that one over to you?
spk02: Doug, our conviction around executing on M&A has remained very similar to how we shared our thoughts around the IPO process. The answer is that we have a strong balance sheet, $63.3 million of cash at the end of the year with an additional undrawn facility of $22.5 million. And so while certainly it's a little bit more expensive for us to add in significant equity into those deals, we actually – I'm also believe strongly that, that there is a reason to still use equity as consideration. It's important to, for buying a founder led business to make sure that they're like, you know, well incented into the longterm as well and tied into the business. And so, you know, certainly we are evaluating on a deal by deal basis and each deal, as you know, comes with a little bit of a, a different structuring opportunity. But for the most part, we feel like we have all the different tools needed in order to continue to execute against the M&A opportunities that we see in front of us.
spk08: Great. Great. Thanks, Doug.
spk07: Our next question comes in from David Pierce at Raymond James.
spk01: Hey, guys. Good morning. Good morning. I just wanted to touch on something you briefly mentioned in the call regarding your sales and marketing expense not ramping up as quickly as you expected. Is that reflective of a tricky hiring environment? Is it a timing issue type of thing? Could you just add some color there?
spk04: Brian, did you want to, when thinking about kind of the timing of those investments, I think maybe let's, why don't you take that one and then I can add on additional color.
spk02: Yeah, David, I mean, I think you hit the nail on the head. There are certainly elements related to this great resignation and some, you know, very competitive market in the tech space specifically. We, in general, are, you know, the number of folks that we've been able to bring out to the business over the last number of years have been tremendous. And we don't have an issue of attracting that talent. There's obviously been a lot of folks moving around, which is really reflective of that sales and marketing beat. So it's not a beat that we're looking forward to putting out there. It's not certainly a planned one. We want to make sure that we are engaging. bringing on all the heads that we need in order to drive top line growth. So I think you can expect that delta to narrow in the coming quarters as we get everyone fully on board. And we're deploying a bunch of strategies to make sure that we have all of those requisite heads needed in order to drive that growth and making sure that we have additional heads to kind of counterbalance some of the effects that we're seeing in market from a resignation perspective.
spk01: Great. No, appreciate it. And the second question I have, again, it's very much just something I noticed with regards to one of the line items, your financials, and it just relates to the derivative loss that you guys posted for 2021. I noticed that if you add up sort of the numbers from the prospectus and then your Q3 and Q4 numbers, it's different to the annual numbers you guys are reporting now. Is there some restatement that was there that we should be aware of? Not a restatement, no.
spk02: Not a restatement, David. There was a revisit on some of the assumptions related to the Q1 exercise of some of the warrants that took place in the year. And so it was just a true up to get it through the fourth quarter. And there's some more detail in our MD&A as well.
spk08: Great. Thank you. No problem. Great. Thank you.
spk07: And with that, we're going to take now a question from our webcast. The question is, why have you not announced any acquisitions during your IPO? You asked that you had a robust pipeline. How is this progress progressing?
spk04: Thanks, Sarah. And thanks for the individual who submitted that question over the webcast. We if we look at, you know, we went public on October 25th. We as we stated during the IPO, we had a great pipeline and we maintain that great pipeline. We've been working through that. We were really engaged with with a number of exciting opportunities and we feel really good about the work that we're doing there. Certainly the timing of it in terms of when we went public over the holidays, things tend to slow down just a little bit. But we remain really committed to this part of our strategy. And we are excited to bring a couple of great deals to market over the coming quarters. So stay tuned on that front.
spk08: But we have not moved away from that part of our strategy in any way.
spk07: Great. We have another question from the webcast. The question is, should we expect gross margins to increase steadily? And is this the best leading indicator for figures of profitability?
spk02: Thanks, Sarah. I'll take that one. Yeah, sure. Everyone should absolutely expect their gross margins to increase materially over the next two years. We still expect to exit with gross margins in the mid to high 60s in 2022 and then exit 2022 with margins in the 70s. And as we have shared, there's really three main drivers that contributed to the fourth quarter margin expansion and will absolutely contribute to the margin expansion over the next two years. And those are fixed fixed data cost structures, the vertical integration of our events platform. Daryl mentioned that we have done 600 earnings events on our own platform. That's just the initial evidence of that sort of strategy playing out as we move over all of our customers to our platform, as we move over all different event types to our platform, we'll be realizing more margin expansion specifically in that product. And the last one is around the automation and optimization of how we interact with our customers. And again, as we work our way through the year, we're going to start to realize much more efficiency there. And so due to Pays to Come investments, you can anticipate some variability in the near term with greater margin expansion occurring in the second half of this year.
spk07: Okay. And our last and final question from the webcast, you've mentioned the investment in growth sales teams to expand wallet share with the current website, uh, and earnings customers. What are your expectations to be able to attach CRM products to these existing logos?
spk04: Thanks, Sarah. And again, thanks for the individual that asked that over the webcast. So, um, When we think about our value proposition, it really is around our platform. So we have a broad set of products. If we're talking about just on the corporate side, we have a broad set of products that are designed to service investor relations workflows. We look at what we do on the website side of it in terms of investor websites. the event side in terms of earnings calls, such as this one that we're on today, investor days, etc. And then when we get into the CRM and analytics side of the business, the really the value proposition is that as customers adopt more than one product, there really is a one plus one equals three. So we're able to take all of the kind of behavioral analytics that comes out of our communications products and bring that into our analytics and CRM products. That value proposition, that unified platform allows us to deliver really differentiated value to our customers and really separates the product. So if we're talking about specifically CRM from our competitors in the market. We had actually a fantastic quarter, the fourth quarter, and we don't break out kind of a per segment, a per product segment revenue, but we've had just an amazing quarter in terms of overall bookings. So record bookings in terms of CRM sales. in recent times. And the really promising thing about that is that the mix in terms of those sales coming from both existing customers and new logos. I think the key thing to understand is that one aspect is about driving the upsell and cross-sell within our existing customer base, but the also is an equally as important as new customers coming on board to the platform is having them come in at a higher ACV. So really adopting a broader set of those products in their initial purchase and the initial decision to join the Q4 platform, them kind of adopting a broader set of products. So we're really pleased with that. And I think, as I mentioned in the prepared remarks, We've been doing a lot of work in terms of kind of the underlying aspects, infrastructure aspects in terms of how our platform operates. And we're really excited about some of these new platform releases that are coming throughout the course of 22, which many of them will be tied in and kind of connected to the CRM. But some exciting things to come on that front. So we remain really positive on it and we think that there is some great results to come.
spk07: With that, we have no further questions.
spk04: All right. So maybe. Yeah. So I'll just take a few minutes just to to wrap up. So first off, I want to thank my my co-hosts on the earnings call today. Thank you, Ryan. And thank you, Sarah, for a great session. And I wanted to remind everyone as well is that what you're experiencing here is our Q4 earnings product. This is something that, as mentioned during the call, we've got a lot of our customers utilizing this product. And we're looking forward to bringing new and more innovative solutions across all of our customer segments, both on the corporate side and the sales side in 22. And so we look forward to speaking to you all again over the coming quarters. And on that note, we'll wrap up today's call and have a great day out there, everyone.
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