Q4 Inc.

Good morning, everyone, and welcome to Q4's second quarter 2023 earnings call. My name is Edward Miller, and I am the head of investor relations at Q4. I'm joined this morning by Daryl Heaps, our CEO, and Donna DeWinter, our CFO, to review our second quarter results. Please note, a copy of today's presentation will be available on our website. Please be aware today's prepared remarks are being hosted live on Wednesday, August 9th, 2023 at 9.30 a.m. Following the prepared remarks, Daryl and Donna will host a live video Q&A session with the analysts. We need to remind participants that certain information discussed on today's call may be forward-looking in nature. Such information reflects the company's views with respect to future events Any such information is subject to risks, uncertainties, 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 SADAR. During the call, we will reference 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 financial measures, including for reconciliations to the nearest IFRS measures. The information related to some of the forward-looking information presented today was sourced using generative AI. Please note that unless otherwise stated, all figures are in U.S. dollars. I will now pass it over to our CEO, Daryl Heaves.

Daryl?

Thank you, Ed, and good morning, everyone. Thank you for joining our Q2 2023 earnings call. To get started, I wanted to first congratulate the Q4 team on their execution this quarter. I'm extremely proud of how our team is performing across the business. In what remains a challenging macro environment, the team executed exceptionally well at expanding relationships with clients, driving platform adoption, and expanding average revenue per account. Combining this with our highly successful expansion strategy led us back to double digit growth this quarter. The structural changes we implemented to optimize costs also played a key role in enabling us to achieve exceptional gross margin expansion, reaching an impressive 68% at the end of Q2. Additionally, these changes brought about increased efficiency in our operating expenses, positioning us favorably for enhanced operating leverage in the latter half of this year. While overall capital markets activity remained low during the quarter, we continue to see improvements over prior quarters. Recent IPO listings increased with successful debuts by Q4 clients, including Kava, Savers Value Village, Fidelis, and Fina. We remain encouraged by this increase in IPO activity and look forward to seeing further momentum in the market over the second half of this year. This morning, I'd like to review where we are against our plan, demonstrating our progress by leveraging proof points from our Q2 results, as well as the future opportunities they're helping to create. Today, we are better positioned than ever in our history, strategically, operationally, and financially to capitalize on improving market conditions. But we are not dependent on this turn or waiting for it to happen. As always, our priority is supporting our clients' investor relations goals through our innovative technology, actionable insights, and steadfast commitment to their success. In the second quarter, we launched a new client testimonial program that we call This is How UI Are, which highlights the success we have helped enable for our clients. I want to take a moment to thank the clients that have participated in this campaign. This positive feedback reinforces our ongoing commitment to helping our clients win in the capital markets and delivering exceptional client experience at all touch points across our platform. We also value our clients perspective and appreciate the opportunity to hear their feedback on our platform products and service. It's through our partnership with our clients that we're able to learn, iterate and improve across the entire business. So a big thank you to all of our clients. Moving on to the product, if you've been following us for a while, you've heard us speak about the Q4 platform many times. It's what we've been focused on building for the last couple of years and is designed to transform the way issuers, investors, and the sell side effectively connect, communicate, and engage with one another. I'm pleased to report that we recently crossed over 2,000 clients actively using the Q4 platform to manage their IR communications and investor engagement. During the quarter, more than 50 million investors access investor websites, email alerts, and events across the platform. And with over 365,000 investor profiles, clients are able to not only communicate, but identify institutional investors across the platform. The Key4 platform is central to our growth strategy, and you will continue to see us expand our predictive workflow, data, and analytics over the coming quarters. We have an exciting roadmap ahead, and I can't wait for our clients to experience the benefits this will bring. Today, the Q4 platform drives thousands of our websites, earnings events, and related capital markets activities across our client base, serving over 15 million investors a month. The key differentiator in our platform strategy is that all of the data and analytics is unified across all of these capital markets experiences, which enables us to provide a set of workflow tools and analytics to help our clients manage all of their engagements with the streets. Across the bottom, you can see each of the products that run on the Q4 platform, including website management, earnings lifecycle, events management, engagement analytics, and IRCRM. These solutions help our clients in a number of ways, including how they use their investor website to communicate and engage with investors, delivering flawless earnings and related investor events, and finally, how to identify and target the right investors at the right time. All of these tools work together, driven by our unified data and analytics, helping to drive relative valuation for our clients. As I'll cover in a moment, AI is being infused across the platform and bringing new and exciting capabilities to further drive impact for our clients. I'll now take a few minutes to provide an update on some recent product innovations. We made significant enhancements to the web management application, providing a faster and more secure way for thousands of our clients to manage their IR website. In today's fast moving markets, we know that all IR teams need the ability to update their IR websites with speed and accuracy. During the quarter, we saw a 54% increase in the number of clients using the web management app from last quarter, and we experienced a 22% increase in actions executed by clients over Q1. It simply means that significantly more clients are using the app and these clients are doing much more through the app. This helps us deliver rapid and accurate service experience in one of the most important aspects of our relationships with our clients. We announced the launch of a new application called Earnings Lifecycle on the Q4 platform. This application aims to streamline the entire earnings process for IROs by providing enhanced visibility and a unified workflow. The Earnings Lifecycle application allows clients to make precisely timed and accurate earnings-related website updates in a secure and confidential environment. With this new offering, Q4 is redefining the earnings lifecycle by providing a centralized workflow that aligns with clients' busy earnings schedules. The highly secure experience ensures the confidentiality of material information shared on websites and provides accurate and timely management of all stages of the earnings process, including detailed reporting to leverage data and increase engagement among investors. Q4 launched engagement analytics earlier this year, designed to provide our clients with the ability to deeply understand their investors, their behavior, and that of their peers. This quarter, we announced enhancements to EA focused on institutional targeting. This new functionality allows IROs to gain insights into how specific institutions' interest in their company is changing over time and how it compares to peers in their sector or market cap. The proprietary data and access to thousands of global issuers provides IROs with the ability to evaluate the effectiveness of their targeting efforts and uncover untapped investor opportunities. These enhancements aim to help IROs connect with the right investors at the right time, ultimately driving increased levels of institutional awareness. Q4's commitment to leveraging industry-leading proprietary data and developing artificial intelligence offerings further strengthens our position as the leading capital markets access platform. We've already witnessed the positive impact that these enhancements are having on our clients' investor relations efforts and are eager to continue to expand upon these analytics to provide even more value to our clients. There have been 370,000 Q4 accounts created by investors over the past nine months. In Q2 alone, 85,000 accounts were created. This feature enables investors to easily sign into events without the need to register each time. Q4 Accounts improves the engagement experience between investors and corporate IR departments. We continue anticipating growth in Q4 Accounts throughout the remainder of 2023 and beyond. The Q4IR CRM continues to provide innovative solutions that drive satisfaction for our clients. In fact, we recently published two case studies with our clients, Revity and Zuora, that detail how CRM helped them to scale their team's time and impact and deliver solutions to support an active targeting program. Q4 Go, our mobile app that launched last quarter, has seen swift adoption with approximately 300% growth in app downloads and a 400% increase in sessions since inception. The mobile app delivers access to key CRM workflows that are fully integrated into the Q4 CRM, including identifying contacts, advanced search capabilities, and meeting management. It's built from the same unified data and insights found on the Q4 platform, ensuring its scalability in the future and the potential to interface with other critical workflows like events or analytics. We have made tremendous progress on pioneering generative AI tailored specifically for investor relations tasks. This will help IROs search, navigate, and summarize workflows and data more effectively. We look forward to sharing more details on this generative AI as it nears launch later this year. We have been showcasing the beta demo to several of our top clients, stakeholders, and members of the sales side, and the feedback has been extremely positive. In fact, the early drafts of this script we are using for today's call and our prep for analyst Q&A were generated by the Q4 AI, saving our IR team a huge amount of time in preparation. We are confident that we are able to continue to combine our proprietary data and product workflows. AI will give us the ability to both save our clients a significant amount of time while also enabling them new insights and recommendations on how to engage investors most effectively. We are super excited to bring these to market very soon. I'm pleased to announce the appointment of Tim Stahl as our new Chief Revenue Officer this quarter. Tim is a seasoned SaaS sales leader who will be invaluable in aligning our revenue-related functions, enhancing our go-to-market strategy, and maximizing sales performance. And we're just thrilled to have him on board. Both Tim and Keith Reed, who was appointed as COO in April, have made significant progress in our sales and operational efficiencies this quarter. We expect their contributions to accelerate cross-selling and upselling. At the end of Q2, more than two-thirds of our ARR is generated by clients using two or more products, and momentum continues into Q3. Additionally, Dorothy Arturi, our Chief People Officer, was recognized by the Globe and Mail with the Best Executive Award for her exceptional leadership. Dorothy is dedicated to building a supportive and inclusive culture at Q4, and I'm proud of her success. And with that, I'll now pass it over to Donna to take us through the Q2 financial results. Donna?