TECSYS Inc.

Good morning, everyone. Welcome to Texas first quarter fiscal year 2024 results conference call. Please note that the complete first quarter report, including MD&A and financial statements, were filed on CEDAR Plus after market calls yesterday. All dollar amounts are expressed in Canadian currency and are prepared in accordance with international financial reporting standards. Some of the statements in this conference call, including the question and answer period, may include forward-looking statements that are based on management's beliefs and assumptions. Actual results may differ materially from such statements. I would like to remind everyone that this call is being recorded on Friday, September 8, 2024, at 8.30 Eastern Time. I would now like to turn the conference over to Mr. Peter Burrenton, Chief Executive Officer at Texas. Please go ahead.

Thank you. Good morning, everyone. Joining me today is Mark Bintler, our Chief Financial Officer. We appreciate you joining us for today's call. As many of you saw in our results posted yesterday, our company began fiscal 24 with another solid quarter led by record revenue and strong fundamentals. With 44% growth in SaaS revenue, We've seen the results of our investments over the last several quarters in business development and R&D. We believe our continued momentum is a testament to our clarity of vision, sustained investment in technology, and obsession with our customer success. Our primary mission remains unchanged, to empower supply chain users to perform their tasks efficiently and effectively. Done right, organizations running these supply chains are able to operate more efficiently, mitigate risk, adapt to market demands, differentiate themselves from competition, and seize opportunities to grow. Our role with Texas is to provide the right combination of software, services, and expertise to meet those business objectives. And that's what we have been doing. We have consistently demonstrated our ability as a technology partner to provide solutions that meet and exceed customer expectations. Much of this will be on full display in a couple of weeks. where we will be hosting the 2023 Texas User Conference, our first since the pandemic. With a high level of enthusiasm, we have higher registration numbers than any event in our 40-year history. We've been laying the groundwork for this event over the last few months and have been promoting a remarkable lineup of customers and strategic partners to help strengthen our base and put the spotlight on the business successes experienced by them. From Warner Electric's journey of innovation and the AI-driven augmented cluster building to insights at St. Luke's Health Systems speaking about their visionary consolidated pharmacy service center. From Intermountain Health and Baylor Scott and White Health to Nissan North America sharing their supply chain management stories, we are confident that the successes of our customers will create new market opportunities. And with AWS, Locus Robotics, Zebra Technologies, Rise Now, and other partners, we have more partner representation than any other conference in our history as well, an endorsement of our strengthening global alliances ecosystem. We look forward to hosting an amazing user conference where we have the opportunity to showcase innovation, best practices, and knowledge sharing. Turning back to the results, I'd like to take a moment to summarize the key events of the first quarter of fiscal 24 and results of operations. Mark will then walk us through the financial results in more detail. And finally, I'll comment on our outlook, followed by Q&A. Our company began fiscal 24 with sustained growth underscored by that 44% year-over-year SAS revenue growth, a 23% increase in total revenue, and a healthy RPO up 36% over the same time last year. We added new logos across verticals and geographies, including two new healthcare networks in the border, one of which was in Canada. We also signed a new healthcare network in August, just after the quarter end. We again closed solid base business, including significant expansions across verticals and renewals that extended commitments from existing customers. Our SaaS bookings at $1.9 million in the quarter were down compared to the same quarter last year. Q1 of last fiscal year was an unusual comp with pent-up demand releasing post-COVID and an exceptionally large order in that quarter as well. Q1 of this fiscal year was a more normal Q1 with summer vacation impact. We remain encouraged by continued solid new pipeline creation and overall market activity. So as we close out another successful quarter, we're pleased that we continue to capitalize on the opportunities in front of us. We continue to add new hospital networks and global brands to our repertoire of clients, and we enjoy an expanding pipeline of new SaaS opportunities, expansions, and conversions. We see a solid path for shareholder value creation. As we continue to invest in the solutions we sell and the manner in which we sell them, Texas is proving to be among the best cloud-based solutions available in the markets we serve. And we have the people, the partners, the products, and the plan to provide what the market demands. Mark will now provide further details on our first quarter financial results, as well as financial guidance on several key metrics.

Thank you, Peter. We're pleased with strong performance in our first quarter ended July 31st, 2023. We had yet another record quarter in total revenue at 42 million. That's 23% higher than 34.2 million reported for the same period last year. As many of you know, a significant portion of our revenue, in fact, about 73% this quarter, is denominated in U.S. dollars. As a result, movements in currency exchange rates have an impact on our reported revenue and growth. FX rates, including the impact of hedging, had a positive $1.5 million impact on revenue in the quarter compared to the same quarter last year. On a constant currency basis, total revenue growth was 17% in Q1 of fiscal 24 compared to the same quarter last year. Total revenue, excluding hardware, increased 16%. compared to the same period last year, or 11 percent on a constant currency basis. We continue to experience strong and steady revenue streams underpinned by a 44 percent increase in SAS revenue, up from $8 million in Q1 of fiscal 23 to $11.5 million in Q1 of fiscal 24. On a constant currency basis, SAS revenue was up approximately 38 percent compared to the same quarter last year. SAS remaining performance obligation, or SAS RPO, was $139.4 million at the end of Q1 fiscal 24. That's up 36 percent from $102.5 million at the same time last year. On a constant currency basis, that growth was 33 percent. Maintenance and support revenue for the three months ended July 31, 2023, was $8.3 million. That was flat compared to the same quarter last year, or down about 4% on a constant currency basis. Maintenance and support revenue generally follows the trend of license revenue, and we expect that as current customers migrate to our SaaS offering, maintenance and support revenue will decline over time. Professional services revenue for the quarter was $14.9 million. That was up 9% from $13.6 million reported for the same quarter last year. or up 5% on a constant currency basis. As we've noted in the last few quarters, we're starting to see the impact of our transition to SaaS ultimately have on our professional services revenue line. That is, we're seeing a continued reduction in custom development work as customers opt for a more out-of-the-box approach to platform implementations. We're also continuing to experience the increased collaboration of our partner ecosystem in helping to implement our suite of solutions. While we expect that over time these factors will continue to moderate our professional services revenue growth, we had another solid quarter of professional services bookings, which I'll speak to in a moment. As we disclosed in our published MD&A, we expect total services revenue, so that's combined SaaS, maintenance, support, as well as professional services, ranging between $34.5 million and 35.5 million per quarter in the short term. Hardware revenue in Q1 fiscal 24 was 6.8 million, up 77% compared to the same period last year. As a reminder, we sell primarily third-party hardware to our customers for warehouse operations and in-hospital point-of-use storage and tracking. While hardware revenue can tend to be uneven, It is a key component of our market offering and thereby supports our recurring revenue business. Like last quarter, our hardware backlog remains strong, driven primarily by hospital network point-of-use orders. Turning now to bookings, SAS bookings are reported on an annual recurring revenue basis, and as Peter mentioned, SAS bookings were $1.9 million in the quarter, which is down 50% compared to $3.9 million in the first quarter of last year. Professional services bookings were $13.8 million in the quarter. That's up 42% compared to $9.7 million in the same quarter last year. Professional services backlog was a robust $40.2 million at July 31, 2023. That's up 31% from the same time last year. For the first quarter, total gross profit was $19.5 million. That's up 32%. compared to $14.8 million in Q1 of last year, and that's led by higher gross profit contribution from SAS, maintenance, support, and professional services. As a percentage of revenue, total gross margin was 46% in the quarter compared to 43% for the same period last year. Combined SAS, maintenance, and support, and professional services gross profit margin for the three months under July 31st, 2023 was 50%, compared to 46% in the same period in fiscal 2023. The main component of the increase in this gross profit margin was SAS margin expansion. There was also some tailwind here from FX. Switching now to our expenses for the quarter, operating expenses increased to $17.7 million That's higher by 3.1 million of 21 percent compared to 14.7 million in Q1 of fiscal 23. The increase was primarily the result of higher research and development costs as well as higher sales and marketing costs. Looking ahead to Q2 of fiscal 2024, we expect sales and marketing costs to temporarily increase primarily due to added marketing program investment including costs related to our user conference, which, as Peter mentioned, is in September. We also expect that research and development costs will increase slightly in Q2, resulting from investment in our platform and product offering and the normal impact of our annual salary increase cycle. Net profit for the quarter was $1.2 million, or $0.08 per fully diluted share, compared to $40,000, or $0.00, for fully diluted share in the same period last year. Compared to the same period last year, net profit was positively impacted by the higher contribution from SAS and associated higher gross profit and favorable foreign exchange. Adjusted EBITDA was 3.2 million in Q1 of fiscal 24 compared to 1.5 million last year. Net profit and adjusted EBITDA were both positively impacted by favorable foreign exchange of approximately $1.2 million compared to the same period last year. We ended fiscal 2024 with a solid balance sheet position. We had cash and short-term investments of $31.9 million and no debt. Q1 net cash used in operations was $6.9 million, primarily the result of normal seasonal working capital changes in that quarter. Finally, with respect to financial guidance, With our growing SAS revenue driving up recurring revenue, we have greater visibility into future revenue. As a result, recall the last quarter for the first time we provided financial guidance. We would like to reiterate that guidance for total revenue growth in fiscal 24 in a range of between 10 and 15 percent, total SAS revenue growth for fiscal 24 in a range between 35 and 37 percent, and in terms of profitability, we're reiterating financial guidance for adjusted EBITDA margin in fiscal 24 of 6%, and the fiscal 25 adjusted EBITDA margin in a range between 8% and 9%. I'll now turn the call back to Peter to provide some outlook comments.

Thanks, Mark. Texas' stable growth continues through the first quarter of fiscal 2024 with a strong balance sheet and a robust backlog and sales pipeline. We are seeing widespread buyer intent across target markets, solid opportunity cycles, and a highly capable sales team with the tools and talent to capitalize on a market that is ready to invest in new technology. We continue to solidify our leadership position in the healthcare market, supported by a great partner network and rising adoption of the clinically integrated supply chain and consolidated service center model. The upcoming November 2023 compliance deadline for the U.S. Drug Supply Chain Security Act provides a favorable backdrop for our consolidated pharmacy inventory management solution. With customer proof points from organizations like Parkview Health and St. Luke's Health System, we're well positioned to be the preferred vendor to support this developing best practice. Our expanded healthcare sector offerings and growing footprint gives us confidence that the healthcare sector will continue to serve as an important revenue stream for us. Our converging distribution business continues to represent a massive market opportunity. We continue to hone our sweet spot there and carve out our share of that pie with rising market indicators driven by fundamental change to the supply chain industry. Change is spurred by aging legacy systems, digital adoption, and a realization that heightened consumer expectations are here to stay. So in summary, I want to remind analysts and investors of some key themes for Fiscal 24 and beyond. First, a sustained commitment to our expanding SAS revenue model, which will drive changes in the way we deploy solutions and delight customers. Secondly, a continued strategic partnership approach characterized by deeper and stronger alliances. This will help us tap into new opportunities and fuels our scalability around the world. Third, an emphasis on advancing and deepening our healthcare vertical covering strategy. our healthcare vertical covering both MedSurg and pharma. We continue to solidify our position as the go-to provider for healthcare supply chain solutions. Lastly, a continuous evolution of our distribution and omnichannel business platform that takes advantage of innovative technologies and the power of data. And as a final point, I'd just like to stress across our markets that we will place emphasis on customer success. We have long stood by the philosophy of customers for life, A big part of that formula is to deliver value quickly, stay connected, and then expand on the value delivered. With that, we will open the call up for questions. Thank you.

Thank you. If you are an analyst and would like to register a question, please press the 1-4 on your telephone. You will hear a three-tone prompt to acknowledge your request. If your question has been answered and you would like to withdraw your registration, please press the 1 for about a three. Once again, to register a question, please press the 1-4 on your telephone. One moment, please, for the first question. Our first question comes from Amar Ezat with Industrial Alliance. Please proceed.

Good morning. It's Andre on behalf of Amar. Thank you for taking our questions. You're tracking above your guidance for top line and SaaS growth. Last quarter, you also had strong momentum. Just wondering, what's driving the performance relative to your initial guidance? And do you foresee this momentum continuing?

Want to take that one, Mark?

Yeah, sure. Yeah, thanks for the question. I mean, I think our, you know, our top line revenue was really strong. And when we provided the guideposts there for total revenue, You know, we were thinking about a full year, and that's the guidance we provided. I think the thing you have to watch pretty carefully in our numbers is that hardware number in our P&L, which, you know, can move around quite a bit. And we had a pretty robust hardware quarter this quarter. We also have a pretty good backlog. But if you look across last year, you know, our hardware quarters range from $3.8 million to $6.9 million. So there's quite a bit of movement that can happen in there. So I think that, you know, that provides a little color around that 10% to 15% guidance range that we, you know, that we provided and are sticking with for right now.

Got it. Thanks. And how much are you budgeting for your user conference later this month?

Yeah, I mean, that's... We haven't really disclosed that number, but in really rough orders of magnitude, that's roughly a half-a-million-dollar event for us.

Got it. Thanks. And one more from me. The last couple of calls, you noted that you didn't see many opportunities for inorganic growth due to rich pricing. Just wondering how that has evolved since the last call.

Yeah, there's no real change there. I mean, we continue to poke around and look at what's out there, but our focus at this point is on the organic side. Thank you.

I'll pass the line. Thank you. Thanks for the questions.

The next question comes from Gavin Fairweather with Cormark Securities. Please proceed.

Oh, hey, good morning. Maybe just a quickie for Mark to start. Just looks like the CAD strengthened a little bit in the quarter. Can you just discuss the impact that FX had on ARR growth this quarter?

Yeah, the headline growth there, I mean, I think we, you know, if you think about it, you know, sequentially, we moved from like a 132 level last quarter to a 136 level, so I think there was about maybe three to four percentage points of jail in there.

Got it. And then maybe for Peter, just can we dig a little bit deeper into the healthcare sales environment? How would you kind of describe buyer intent? Obviously saw a couple new healthcare networks join in one subsequent quarter, but I I guess when you look into the pipeline, how are you thinking about the number of IDNs and how are they moving and how are you thinking about the ability to increase the pace of IDN ads?

Yeah, I mean, we're sort of waiting to see it actually fully pick up speed. It seems to be accelerating. That team is, you know... probably Brown numbers. That team is probably 30% larger. The sales team is right. 30% larger than it was this time last year. And yet they are, you know, very busy. The total pipeline in sales in healthcare, uh, is up, uh, you know, measured by sort of SaaS, you know, potential SaaS revenue is up over 50% from this time last year. So we're seeing a lot of excellent activity. You know, at the same time, we are seeing, frankly, it seems like half the management teams we were trying to close deals with were in Europe for a vacation this summer. So it's, you know, everything is now returning as we get into September and things are going to be picking up speed. So we'll have to see how the year works out. But if I look at sort of what we see on the dashboard, great sales team, significantly larger than it was last year, and a pipeline up by, you know, more than 50%. So we're feeling pretty bullish about GitLook and, you know, in healthcare, that's for sure.

Okay, good to hear. I mean, maybe some of that will turn into a tailwind in the quarters ahead here. Maybe just on maintenance, Been holding pretty steady. I keep expecting a bit of a deceleration. Maybe you can update us on the planned pace of migrations and how those conversations are going. You know, I mean, you talk about maintenance kind of starting to moderate in the years ahead, but it seems to be holding steady. So maybe just unpack that a bit for us.

Yeah. I think, you know, the conversions from on-prem to SaaS, they do continue. And if we look in our pipeline, the activity there, it's actually, the pipeline's actually ahead of where we expected it to be right now in terms of, you know, addition, additive conversion opportunities. But you raise a good point. Like, we're expecting that number to go down, and it doesn't. You know, our retention rates are super high. In fact, we measured those LTM, and they ticked up to, like, 97%, you know, gross retention in this last, you know, 12-month period ended July 31st, 2023. So really solid retention is helping, you know, support that number a bit. The other thing is, you know, some of our other businesses, in particular that hardware business and that proprietary technology business that we do, it does attach some maintenance and support to that business as And so that's conspiring also along with price increases and strong levels of retention to kind of moderate the decline there. But we do see that conversion pipe building and expect that it's going to continue to head down rather than out that total maintenance and support line.

Got it. And then maybe lastly before I just on SaaS gross margins. You provide that kind of illustrative walk over the next few years on kind of services gross margins and SaaS gross margins. I'm curious how the back-end optimization work is progressing in that deck. You kind of have assumptions around 75% incremental gross margin on SaaS. I'm curious if that kind of incorporates some of the efforts you're making on the back-end. and if there's also an opportunity to kind of improve the existing SaaS space as well.

Yeah, it does incorporate that, but I think the more we scale there and the more we scratch and invest there, you know, the more efficient we become. You know, so we're making, we continue to make progress on, The key metrics in there for us are public cloud infrastructure costs as a percentage of revenue. We continue to make progress there. That's with platform optimization and overall infrastructure efficiency, how we set up the platform and utilize public cloud infrastructure. So we continue to make progress there. And the other The other main vectors are cloud operations costs and our ability to execute there. We measure that metric internally as cloud operation costs X public cloud infrastructure costs and monitor that as a percentage of revenue. And we see that, you know, still doing interesting things as well as we scale and continue to leverage, you know, our technology, our platform, and external technologies that we use to monitor, et cetera, that help us manage that metric. So I think there's more, you know, there's more goodness to continue to, you know, continue to squeeze out of that margin as we move forward and continue to scale.

Great. I'll pass the line.

Thank you. Thanks. Our next question comes from John Shaw with National Bank. Please proceed.

Good morning, guys, and thanks for taking my question. I also have a question on gross margins. You guys definitely have a decent margin expansion this quarter driven by the SaaS business. So from a modeling perspective, is this improvement permanent? And also, how should we think about a margin program in future quarters?

I would direct you to our investor deck there, John, and we provided some kind of projection numbers. I hesitate to call them forecasts, but sort of projection numbers based upon some assumptions. And we started publishing those a couple of quarters ago. we outperformed what we expected there in Q4 slightly. And I would say right now we're tracking with, you know, our expectations. And I would leave it at that.

Okay, thanks. And in terms of ARR, how should we read into the Q1 number given it's just sequentially flat? Is it also because of the timing and deal lumpiness?

Yeah. I mean, the ARR number being sequentially flat, I think we had, you know, we have that 1.9 million SAS bookings number, which was, you know, not a fantastic quarter. So that didn't drive up that ARR as much as it otherwise, you know, would have increased. So I think that's probably the main driver for the sequential flatness there.

Okay, thanks. Last question is to Peter. So Peter mentioned your sales team is 30% larger than compared to last year. So my question is around the plan to continue to grow the headcount for the rest of the year?

Yeah, I was specifically – first of all, I was specifically referring to the healthcare side of the sales team. So, you know, that's where the bulk of the growth has gone, and that's where we've seen a substantial increase in the size of that team. We do plan to continue to invest in the team. I mean, you know, when you look at our LBV to CAC numbers, you know, general guidance in sort of best practices in the SaaS world. You know, if your LTV to CAC is above three, you should be pouring more money into sales and marketing. And, you know, if you look at our general trend over the last, you know, four quarters or eight quarters or whatever time frame you want to pick, we're well above that number. So we continue to invest more in sales and marketing. You'll continue to see that number rise. We limit our investment there significantly. Largely just to manage productivity. You know, there is a point at which you grow that organization too quickly and you can actually end up with, you know, declining sales results because there's too many new people, not enough sort of. in-depth knowledge of the marketplace. You start blowing opportunities and so on. The practical considerations of growing an excellent sales team are what limit the investment there because the underlying financial metrics that we track and the KPIs we track tell us that we should be continuing to expand that team quite rapidly.

John, just going back to your last question about ARR, I failed to mention, but I should have the the FX impact, the sequential FX impact from the end of Q4 to the end of Q1 was actually a negative drag on that ARR number. So, you know, that kind of offset the gains of the increase in ARR from the SAS bookings.

Okay. Thanks, Peter. That makes sense.

Thank you. Our next question comes from Sutan Sukumar with TIFO. Please proceed.

Hi, Daniel. I'm for Sutan today. Morning, Peter and Mark. My first question here is on EBITDA this quarter. Can you speak to what drove the B? Was it due to the case of timing of growth investments, or are you seeing early leverage benefits in the business?

Daniel, can you repeat that question? I didn't quite hear the beginning of it. It kind of broke up a little bit for me at the beginning.

Yeah, sure. On your EBITDA beat this quarter, can you speak to what drove the beat? Was it due to the pace or timing of growth investments?

Yeah, I mean, our OPEX was up pretty significantly in the quarter, but the big contribution, the big change was a contribution, you know, the contribution margin in a quarter, which was really, really solid, as we mentioned, driven mostly by SAS, you know, expansion, but also with a little bit of FX tailwind in that number.

Okay. Good. On professional services revenues, growth appears to be quite healthy again this quarter. Is there anything specific to call out? And can you speak to how much partner engagement there was during the quarter?

Yeah, I mean, I think the thing to call out there, Daniel, is our backlog heading into this quarter was very large. We did actually quite a bit of bookings yesterday. in the quarter as well. So, you know, it continues to be, you know, over $40 million of backlog, which for us historically is still a very robust number. So we think that probably bodes pretty well for, you know, the upcoming quarters. In terms of partner engagement and partner involvement, I guess Peter mentioned, you know, we've got a whole, we've got just a, Great, great stuff happening on that front. You know, we continue to add, you know, interested SI, SI partners. They're more and more involved in our deals. They're more and more involved, you know, on the front end, you know, on opportunities. And that gang is getting, yeah, it's getting the names that are in that group are getting bigger and the participation is getting, you know, more fulsome. So we're pretty excited about what's happening there.

That's good to hear. Now, just to quickly recap in case I missed it, I think you mentioned that you guys won two additional IDN wins this quarter. What are your expectations for the year? Is it still around 12?

That's a good question. We debate that all the time. I mean, we're seeing we are seeing ever larger opportunities. At the same time, we are seeing quite a large number of opportunities. You know, average deal size continues to sort of slowly increase. So where that number will land, you know, it's hard to call. You know, we certainly are investing in the sales organization and structuring the sales organization to continue to drive that number up. And we would like to see us get in the, you know, in the 12-ish range for the year. And, you know, continuing our markup, our plan is still to get to the point where we can add, you know, 20 networks a year, which we'd like to get to within a couple of years. But, you know, that's not a firm forecast. That's just what we're trying to accomplish.

Okay. Last one for me. Can you just update us on the current demand environment for the complex distribution side? And have you seen any changes in urgency from a customer at this point?

No, not really a change in urgency. We are seeing deals starting to flow on that side. You know, we've got – I think we'll see more signed deals probably in this quarter on that side. We did see some activity in the first quarter on that side. It seems like that marketplace is starting to get out of panic mode. The inventory is flowing. The ports are wide open. The factories are open. Things are just generally returning to normal. As they return to normal, we're kind of back to where we were in 2019, which which is that whole sector realizing that they're running platforms that were implemented in time for Y2K. And they're not really designed for today's world at all. So we are seeing action on that side. And I think, as I think I said in the spring, we kind of expected that it would be sometime this fall that the deal flow would actually begin. And I think we're still tracking to that.

Thanks for taking my questions. I'll pass the line. Great, thank you.

Thank you.

Our next question comes from Steven Lee with Raymond James. Please proceed.

Thanks. Hey, guys. I may have missed it, but the SaaS growth of 40%, did you say how much came from the current customers and how much from new logos?

Yeah, we didn't say that, but in the quarter, The bigger driver there this quarter was expansion business.

Okay.

Okay. No, that's fine. And also on your bookings, what would be the split between healthcare and complex?

Yeah, we didn't really disclose that one either, Stephen. Okay. But it would have been – actually, it would have been tipped. It would have been – it was actually pretty even because the expansion deals, you know, had included some nice complex distribution customers. So, you know, those – I think it would have been – in fact, it was slightly tipped towards health care, but complex was definitely contributing to that one as well, but slightly more than 50% health care.

Okay, got it. And when you're talking about bookings here, it applies to both AR and PS, right, Mark? No, I'm talking SaaS. Oh, you're talking SaaS. Okay, got it, got it. And then just, Peter, your comment earlier, I heard you say your total pipeline in healthcare is up 50%, but then the number of IDNs you won was two. Does that mean conversion is very lumpy? Can you talk about conversion rates?

Yeah, I mean, conversion rates are not only lumpy. You know, in health care, we don't have that much conversion left to do. I mean, most of the – maybe not most, but, I mean, a significant portion. I'm trying to think now off the top of my head, but, Mark, we're probably at a point where, what, 75% of our health care clients are already on SASC?

Yeah.

Something like that. Even more. So there's not that much conversion left to do there. What you're mainly seeing there is that the expansion in existing SAS hospital clients is continuing to be quite strong. So, you know, when we look at our pipeline, our pipeline includes some very significant opportunities, but that are from existing customers. So, you know, they don't become, you know, they don't – building into SaaS customer basis, you see that sort of one of these networks becomes themselves.

Right. When we think of significant opportunities with existing customers, is the cycle quicker, shorter?

Oh, yeah, for sure it is. For sure it is. I mean, we already have. You know, we already have a relationship. We've already got trust built up. They've already got a good understanding of our platform and how to use it. They've usually built up an internal team that knows how to, you know, support our platform internally from an end user standpoint. So it's definitely quicker. I mean, there's agreements. I'm just thinking like in Q1, for instance, we signed a fairly substantial expansion and extension of contracts, SAS contracts, And that whole process took, you know, less than 90 days. Got it.

And last one for me, and again, I probably missed it, but did you say how much is your partner influence deals in the quarter? Thanks.

Yeah, what we did disclose there, Steve, is the percentage of our pipeline that's partner influence at the end of the quarter, and that number was 30%. 30%. Perfect.

Thanks, guys. Great.

Thank you. Thanks for the questions. Gentlemen, there are no further questions at this time.

Okay. Well, thank you, everyone, for joining us. And as usual, if you have any additional questions, please don't hesitate to reach out to Mark or I, and we will talk to you at the end of Q2. Thanks again for your time and bye for now.

That does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your line.