TECSYS Inc.

Good morning, everyone. Welcome to Texas Fiscal Year 2026 First Quarter Results Conference Call. Please note that the complete first quarter report, including MD&A and financial statements, were filed on Cedar Plus after market close 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 5, 2025, at 8.30 a.m. Eastern Time. I would now like to turn the conference call over to Mr. Peter Brighton, Chief Executive Officer at Texas. Please go ahead.

Thank you.

Good morning, everyone. Joining me today is Mark Bentley, our Chief Financial Officer. We appreciate you joining us for today's call. I'm pleased to report a strong start to fiscal 26. SAS revenue in Q1 grew 25% year-over-year to $19.1 million, driving total revenue of $46 million, up 9% from last year, or 13% excluding hardware revenue. Adjusted EBITDA was also strong at $3.2 million, up 24% from the same quarter last year. These results reflect the strength of our SAS model and the resilience of demand across our target markets. SAS ARR at the end of Q1 was $79.3 million, up $2.8 million in the quarter. Driving the increase in the quarter was the additional booking of yet another new health system in the U.S. and continued expansions and migrations across our base of hospital networks like Life Sciences, and general distribution customers. On top of that, we added a major biomedical brand as a new logo just after the end of the quarter. Importantly, our SaaS pipeline continues to grow with particular strength in pharmacy and key markets within general distribution. In terms of customer momentum, we have a lot to be excited about. From RM educational resources in the UK and life science logistics in the US, to Cornwall Community Hospital in Canada, and entry into one of the world's largest biomedical companies, we are experiencing activity across industries and geographies. We also saw continued uptake in our pharmacy offerings as more healthcare organizations respond to DSCSA and look to drive efficiency and visibility through their supply chains. Together, these examples demonstrate the depth of engagement and the breadth of our solution portfolio. Healthcare distribution continues to be a growth area... growth area for us. We've been talking about DSCSA legislation for a while now, but as of August 27th, this legislation is now officially being enforced. This together with a portfolio of referenceable customers and a proven DSCSA supporting solution is reflected in our pipeline activity. Beyond customer wins, we are investing in the long-term scalability of our business. As mentioned on our last call, we launched operations in India in Q1. I'm pleased to report that our new team in India has ramped up quickly and is already contributing features and code to our core product lines, accelerating delivery for our customers. As we noted on our Q4 call, we hosted our Texas User Conference early in the quarter, and we plan to hold this event annually moving forward. This event is an important opportunity to engage directly with our customers, prospects, and partners. and it has already begun to translate into new business and contribute to our pipeline. On the innovation front, we continue to advance Texas IQ, building on the momentum we introduced in early Q1 at the user conference. By way of reminder, Texas IQ is a data layer that interacts with the existing Texas ecosystem built on the Databricks data intelligence platform. It is a dynamic tool that unifies fragmented data and delivers AI-powered insights, across clinical, operational, and financial systems. Early feedback from customers has been positive. Use cases are being identified, and we remain confident in its role as a differentiator in the market as we roll it out for general availability in the coming months. Continuing with innovation, as part of our upcoming mainline releases, we are excited about launching generative AI capabilities for our WMS and point-of-use solutions. I'm also pleased to share a company culture milestone. Texas has earned a Great Place to Work certification across all of our global operations for a second year in a row, with 92% of our employees rating Texas as a Great Place to Work. We believe this reflects the trust and dedication of our people, which drives the innovation and customer commitments you see in our results. We have good reason to feel confident about our position in the market. Our backlog in both SaaS and professional services and the strength of our vertical strategy. And so as we continue to invest in the products we sell and in our go-to-market strategy, Texas is proven to be among the best modern cloud-based solutions available in the markets we serve. The steady growth we have experienced affirms our vision and strategy for shareholder value. Mark will now provide further details on our Q1, as well as financial guidance on several key metrics.

Thank you, Peter. As a reminder to everyone, our first quarter ended July 31st, 2025. I'll start with SaaS. As Peter just mentioned, SaaS revenue growth was 25%, reaching $19.1 million in the quarter. As you'll have seen in our MD&A, we've refined our KPIs to better reflect our growth drivers. With SaaS now the primary engine of our business and increasing share of our revenue, we're shifting our focus to SAS ARR instead of total ARR and SAS bookings. SAS ARR is an industry standard measure of near-term SAS revenue potential. And when combined with SAS RPO, it gives strong visibility into the durability of our SAS growth. As Peter mentioned, SAS ARR was $79.3 million at the end of Q1 fiscal 2026. That was up 21% from the same quarter last year. SAS RPO was $226.3 million at the end of Q1 fiscal 26. That was up 16% from the same time last year. Moving on, professional services revenue for the first quarter was up 20% from the same quarter last year, reaching $16 million. And our professional services backlog at the end of Q1 remained strong at 43.7 million. That's up 23% from the same time last year. For the first quarter of fiscal 26, gross margin was 51% compared to 47% in the same period last year. The key drivers here are increasing SAS margins as well as strength in professional services margins in the current quarter. Net profit in the quarter was $762,000 compared to $798,000 the same quarter last year. Basic and fully diluted earnings per share were $0.05 in both Q1 this year and last year. Adjusted EBITDA was $3.2 million in Q1 of fiscal 2026 compared to $2.6 million same quarter last year. And unlike Q1 last year, this year Q1 included about $0.7 million in costs. for our Texas user conference. If you look at adjusted EBITDA on an LTM basis, it's actually up 55% through Q1 of fiscal 2026. We ended Q1 with a solid balance sheet. We had cash and short-term investments of $31 million and no debt. We used about $0.8 million of cash in the quarter to buy back shares under our NCIB normal course issuer bid. Additionally, the board yesterday approved a quarterly dividend of $0.085 a share. Turning briefly to financial guidance, we're maintaining full-year fiscal 26 guidance for SAS revenue growth of 20% to 22%, total revenue growth of 8% to 10%, and adjusted EBITDA margin between 8% and 9%. I'll now turn the call back to Peter to provide some outlook comments.

Thanks, Mark.

Our first quarter performance reflects a strong start to fiscal 26 and the consistency of execution that has defined Texas over the past several years. SAS revenue growth remains robust. Our install base continues to expand into white space with new cross-sell opportunities, and our pipeline positions as well for strong bookings in the coming quarters. Healthcare continues to be a strong growth engine for us, with pharmacy and adjacent life sciences markets, including medical device manufacturers, clinical laboratories, and digital pharmacies, all representing compelling opportunities as we broaden our value proposition in this area. We see this momentum in both North America and Europe, where we are expanding market awareness activities. At the same time, distribution remains a healthy growth vector across geographies. We're also investing in the future with continued future innovation in our elite solution supported by our new India operations and the progress of our Texas IQ offering. We have a solid foundation for reliable long-term value creation. So in summary, I want to remind you of our key themes for fiscal 26. First, we'll continue to invest to maintain and enhance our market leadership across the supply chain landscape with an emphasis on the end-to-end healthcare supply chain. This includes investments in product development and marketing to drive SaaS margin expansion and SaaS ARR growth. Second, we are unlocking the full potential of data with our AI-driven TexasIQ platform as a key driver of value and innovation across our solutions. This will be transformational for our customers. Third, we remain disciplined in delivering customer satisfaction. ensuring our software is reliable, scalable, and easy to use, giving our customers every reason to be passionate advocates for us. We believe these pillars will enable us to continue delivering consistent, profitable growth and shareholder value.

With that, we will open up the call for questions. Thank you.

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the one on your touch-down phone. If you wish to cancel your request, please press the star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. Once again, that is star one should you wish to ask a question. Your first question is from Amir Azad from Momentum. Your line is now open.

Peter, Mark, good morning. Congrats on the quarter. Um, SAS grew 25% in Q1 ahead of, um, your 20 to 22% full year guidance. Um, can you help us reconcile the, um, strong starts with the more, I don't want to say muted outlook, but to the lower outlook is that you guys just being conservative? Are you anticipating, um, any specific headwinds through the balance of the year?

I think it's just the challenge of continuing to increase growth on an ever-growing base of SaaS revenue. At the end of last year, our SaaS revenue growth was 29% year-on-year. That pool continues to grow. The last 12 months through Q1, that growth was 27%. And the quarter-on-quarter growth number, you just mentioned it, But I think if you triangulate on our SAS ARR number and look at the growth rate in SAS ARR at 21%, it sort of puts you right into our guidance range.

Fantastic. Since you've moved away from disclosing bookings and are focusing more on SAS ARR and RPO, And maybe that's a contextual question. Can you frame for us how much of your fiscal 26 SAS growth is essentially carrying RPO versus expected in-year additions? In other words, what's the incremental lift you'll need from new contracts or bookings to stay in your guidance range?

Yeah. So when we entered the year, we were about 90% 2% booked against our revenue, you know, our revenue forecast range. That means our SaaS era was covering, you know, about 92% of our projection.

And how would that, like, compare to, like, previous years? Is that 92% a good number?

Yeah, it's growing. It's growing. It's getting, you know, more and more covered. We're less and less dependent on, you know, new bookings to drive our target number, just, again, as that base of SAS ARR grows.

Okay. Sorry to harp on bookings again, but, like, if I look at your SAS ARR at 21%, RPO grew 16%, and I know there's often a mismatch every quarter. But for our benefit, can you help us understand, again, how the structure of new contracts or booking is evolving over time or over the past couple of years. Are you generally seeing shorter average terms or is the mismatch more about timing of multi-year deals?

Yeah, I think it's more about timing of renewals and then, you know, the extent of renewals as well. Some renewals you know, will auto-renew at, you know, a one-year renewal period. When that happens, you pick up a year of, you know, you pick up a year of RPO. Other contracts will renew for multiple years. You know, that could be three, four, five, even actually more than that. And, of course, that has a, you know, a different sort of outsized impact on RPO. So I don't think anything fundamentally has changed. I think the RPO numbers just I mean, it's a little bit tricky to look at and triangulate back to the SAS ARR number just because of timing of renewals. And I think as our SAS base grows larger and larger, it'll kind of moderate, you know, moderate with scale, you know, that difference. But right now, it's certainly timing related.

Okay. So the average term, if you will – of your RPO today versus like two, three years ago is more or less the same. Is that a fair? Yeah, it's pretty consistent. Yep. Okay. Then one more and I'll pass the line. Hardware tends to be lumpy. I think we all understand that, but I think that's the lowest level I've seen since the PCSYS acquisition in 2019. Can you maybe give us color on what's happening there and how we should be expecting it to evolve over the year?

Yeah, I mean, we still keep having this conversation. And you're absolutely right. That was kind of a low watermark there in the quarter. I mean, we did have some pretty reasonable bookings during the quarter. If I was going to read some tea leaves, I would say that I definitely don't expect Q2 to be lower than Q1. But, yeah, it's a question of timing and uptake and deliveries on projects. And, I mean, there's not anything really, I would say, systemic that's happening there that would, you know, continue to drive down that hardware revenue number. It's just kind of getting to the, you know, this sort of what I think is probably kind of a bottoming out rate right now.

Fantastic. I'll jump back in the queue.

Thank you. Your next question is from Gavin Fairweather from Formark Securities. Your line is now open.

Oh, hey, good morning. Thanks for taking my questions. Nice to hear the commentary around the pipeline in the summer, and Peter talked about the resilience of your customers and the prepared remarks. Maybe we could just kind of check in on the demand environment given the political backdrop? What are you hearing from customers on your investment appetite? Are you finding additional decision hoops that you're jumping through or any bigger focus on ROI? Maybe just some comments on that front would be helpful.

Sure. It's been interesting. The main thing we've been dealing with, I think, over the last five, six months is just a lot of distraction. It doesn't seem to have changed intent necessarily, You know, I haven't heard of any customers say, you know, oh, we're going to hold back on this project and not do it for the next year or two because of, you know, concerns about, you know, for instance, Medicaid. I mean, that was one of my worries was that Medicaid would concern them. We haven't heard that. We haven't heard concern about, you know, tariffs, et cetera. In terms of, you know, intentionally delaying project, what we have seen over the last five or six months is in a number of cases it was just plain hard to get the attention of seniors on moving a project through to conclusion or through to signature just because they're so busy trying to figure out how to source product in and around all the tariffs. So we've been battling distraction, but as I say, we haven't seen situations where boards are instructing management teams to cut back on spend or CFOs doing the same. It's been just distraction. I mean, if you're the head of a supply chain for a large hospital network, The last four or five months have been pretty complicated. At the same time, we were talking about this with the board yesterday. Everyone's kind of getting used to the distraction. So it's kind of getting back to more business as usual. We're looking forward to a pretty busy fall. And it seems like everyone's just kind of getting used to the noise. So it feels like it's starting to move a little quicker again.

Great to hear. And then secondly, just on migrations, and I see here there was another one here in the first quarter, and I know you've made a lot of progress on the base, but how are you thinking about the amount of maintenance there are that will still shift to SaaS over time, and how are you thinking about the shape of that curve this year versus in future years?

That is... Now you're asking us to do some crystal ball gazing, which is really difficult, but what I can tell you is that... The bulk of the migration to SaaS is behind us. I mean, we have, you know, if you look over the last few years, we've come through years where sort of migrations from our old on-prem maintenance space over to SaaS, you know, accounted for sort of 50% of our new SaaS bookings or whatever. Well, that has continued to drop. You know, I don't know when it'll be this year. My hunch is it'll be in the 20% range, maybe 25% range this year. It'll be a lot lower. So more and more of our SaaS growth needs to come from new accounts and expansions of existing SaaS accounts. But what that means is we're also eroding the maintenance space in a way more slowly. I mean, you know, what's left there is really likely to stay there for a fairly extended period of time unless they move to, you know, some competitive product. So we're anticipating seeing that maintenance number drop. I mean, you saw it drop in the first quarter. We're down... you know, almost 20%, actually a little over 20% from last year. Sorry, 10%, 10% from last year. But so we're expecting it to continue to drop. But there's a bit of a floor there at some point, because, you know, most of the drop that you're seeing is related to an effect of rating our own maintenance space. And that is actually slowing down. So So we anticipate that number is, say, continuing to drop, but it's going to drop fairly slowly. You know, I don't know what number you put on it. If I were to hazard a guess, I'd say, you know, averaging 7% to 10% a year over the next five years.

Helpful. And then maybe on Texas IQ, if I kind of heard you correctly in the script, it sounds like you're in the process of starting to sketch out initial use cases now and then socializing them with customers. Right. What's your level of excitement around this in terms of it being another kind of upsell lever that you can pull a year or two out? I don't know what the timeline is as you start to be able to showcase the value to customers.

Yeah, I mean, we're definitely excited about it. I mean, I think we're going to get virtually 100% uptake. I mean, the value it provides is unbelievable. I mean, you know, imagine, you know, I may have used this example before, but, I mean, we see it in the data. We see it in how this platform operates. I mean, imagine a head of surgery in a major hospital being able to just go into a chat and literally say to Texas IQ, okay, how many scheduled surgeries are at risk over the next two weeks? And it comes back and says, you know, 12. And it says, okay, why are they at risk? Well, because you're short of these four products. Which of these four products could we find substitutes for? Well, these three you've got a good substitute for. So just, you know, get some of those. This other one, there's no substitute for. So that means these three surgeries are doomed. They're going to have to be rescheduled. Like, it's literally that level of conversation that you can have with the data. And it just puts... Power into the hands of core decision makers like they've never had before. So I think you're going to have almost 100% uptake in our base. And the other thing I'm convinced it's going to do is I'm convinced it's going to finally begin to flip. the huge percentage of the market, which is still running what they put in back in time for Y2K. You know, I mean, across the general supply chain, there's, you know, varying, depends on which analysts you talk to, but it's anywhere between sort of 70 and 82% or something of systems that are out there running are, you know, were put in place over 25 years ago. And You know, this, I think, is really going to finally start to drive that flip. And, I mean, as you know, it's not just us coming out with a product like this. Our competitors are, too, in the general distribution space. And it's going to finally shake up and wake up that market, I believe. I think we're in for an exciting time.

Great to hear. And then maybe for Mark, lastly, for me, just on services, gross margins, strong again this quarter, obviously. PS utilization looks high, good backlogs still there, and I think, you know, SaaS gross margins are continuing to poke hard. So do you think we can kind of maintain these levels here going forward? Do you see some additional expansion opportunities? Maybe help us out on that line.

On the professional services in particular?

Just, I mean, I was talking about the overall services.

Yeah, yeah, yeah. No, we're definitely expecting, you know, continued growth margin expansion from those two areas. You're right that professional services is, I mean, we had a good, another good strong quarter, and I think we, you know, we've talked about over the last few quarters where the capacity lever is there with the existing team, and utilization is high, and this sort of $16 million number is is, you know, it's definitely at the top end of what we can do with the team. So we're thinking about, you know, that against the backlog and, you know, do we hire there to drive more faster? And, you know, there's always that decision to be made. But I think we can sustain these kind of levels and that kind of margin in the PS area, you know, given that backlog. And I think, you know, on the SaaS side, we just continue to you know, create and see pull through on margin expansion opportunities as that, you know, as that revenue line scales and we continue to invest in product side efficiency. So, yeah, we expect, you know, we expect continued improvement in that margin.

Thanks so much for passing on. Thanks, Gavin.

Thank you. Your next question is from John Hsu from National Bank Financial. Your line is now open.

Hey, good morning, guys. Thanks for taking my question. I have a similar question regarding your SaaS margin expansion. So with the release of Texas Mainline, just curious about implications to your future margin profile. My understanding is that Mainline is a more efficient form of tech infrastructure.

Yeah, that's correct.

I mean, mainline changes quite a few things. I mean, it utilizes much more advanced sort of plumbing on the back end that allows us to share CPU capability and memory capacity and so on in the public cloud infrastructure. It automates the maintenance and upkeep of those environments. So, in effect, if we've got 150 customer environments to maintain, we can literally push one button and update all of them in terms of security updates or patches or any of those kinds of things. And when it comes to migrating forward release to release, you know, what used to be a more significant project can now also happen with the push of a button. So we, for our clients that's out on mainline, you know, we grant them access to a sandbox with the next release, gives them time to do some of their own testing and work and so on. and when they're ready, we just push the button, and within literally a few minutes, they're on the next release. So it's more reliable. It's more scalable. It's more maintainable. Our lever costs are a lot lower. The effort for the client is a lot lower. and our public cloud infrastructure costs are lower. So it's pretty significant. Like in our march to drive SaaS growth margins, I mean, we've been moving them up year by year. The goal is to get them to 80%, and the mainline is a key component of the strategy to get them to 80%.

Thank you, Peter. That's great color. Regarding your R&D calls, how should we think about This cost line going forward, given the establishment of your offshore R&D center, do you think the cost will flatten out at a current level and will become a source of a future margin expansion?

Yeah, I mean, we've got some things in there that are heavier lift right now. I mean, give you an example. For instance, we're currently going through FedRAMP certification, you know, to comply with, I mean, in order to service the U.S. federal government, as well as many of the state agencies and state health care organizations and so on, you have to be FedRAMP compliant. That's a pretty significant effort and is driving, you know, some of the increase you're seeing in R&D costs this year. But that sort of already baked into the number of the run rate this year. So I would anticipate that you'll continue to see increase in R&D costs, but more at a level of sort of, for our hazard, I guess, it's, you know, mid-single digits as opposed to what you're seeing right now. I mean, what you're seeing right now is the impact of a couple of heavy lift items that we had to get behind us. After this, I think you'll be back to a much more muted growth level.

I remember that discussion has been around for a while. So could you give us an updated timeline when things are going to be completed?

I mean, we anticipate that we will be FedRAMP ready, you know, and FedRAMP certified by about a year from now. There's an effort. The process is now sort of well documented, well defined. You know, we think we'll be ready by sort of more or less Christmas time. to enter the certification phase. But the certification phase involves an auditor going through and auditing literally hundreds of internal processes from how you hire people to how you cut staff to how you deploy software, what type of software you deploy, what type of cameras you have at your offices, how your doors lock. I mean, it covers a vast array of subjects. So those audits have to happen. That will happen through sort of the winter and spring. And so we expect that it's sort of into the summer and early fall next year by the time we have our full, you know, authorization operating.

So...

So that's our expectation there. The marketplace is beginning. I mean, the governments are beginning to enforce compliance with it. We're still in early phases of that. We've got a contract running with one of the major U.S. federal government departments, which is actually our sponsor for FedRAMP. And they have temporary permission to work with us. pre-FedRAMP authorization, but within a year we have to be FedRAMP authorized. So it's getting to that point where these various departments and agencies are having to work only with FedRAMP compliant vendors. It's going to be interesting to see what it does in the market because from what we can see, if you look at, for instance, the general WMS and supply chain execution space, There's only going to be a handful of vendors from what we can see right now that are going to be FedRAMP certified. So it certainly means in those market spaces, I think the competition will be a lot less than it used to be. So we'll see how it goes.

That's great to know. Thank you so much, and top line.

Thanks, John. Thank you. Once again, please press star 1 if you wish to ask a question. Your next question is from . Your line is now open.

Good morning, gents.

Wanted to touch on the pipeline growth that you saw during the quarter. You know, it just sounded like it was pretty healthy, pretty robust given the, you know, a more seasonally slower summer period. So with respect to kind of sales cycles and deal sizes, what changes are you seeing, you know, quarter to quarter and over last year? And, you know, curious, how do you think that might translate to that pipeline strength, translate the bookings trajectory over the course of the year? You know, just wondering, you know, is it reasonable to expect a more consistent pace of bookings growth or is there potential or still potential for some outsized contribution in a given quarter?

I mean, these are always hard to predict. I mean, our deals are still lumpy. You know, I mean, if you look at a full year, you know, we try to add anywhere from sort of 16 to 20 million or more to our SaaS number in a year. Uh, so, so when you look at that and say, okay, but you know, what's your average size deal? Well, we've got deals that sign that are as low as, you know, 250 or 300,000 a year of SAS and we've got deals that sign that are, you know, two and a half, 3 million of SAS. So it, it can get, it will still be lumpy. But when we look at the pipeline, I think one of the reasons why you're hearing a lot of confidence from us about the pipeline is we've actually, on the non-hospital side, we've really narrowed the focus. In fact, if you look through our latest investor deck, you'll see we've changed some of those slides. We're really going after the verticals within the distribution space where we know our win rate is over 50%. So, you know, those are, you know, the life sciences areas, you know, pharmaceutical, podiatry, eye care, ear care, you know. et cetera, the 3PL businesses that are related to those verticals, et cetera. So we've got some other ones too. Electrical is one where our win rate is super high. So we've narrowed our focus to the markets where we know our win rate is very, very high. And in spite of narrowing that focus to high win rate markets, we're finding strong pipeline growth. So overall, we're pretty interesting year pharmacy as well in the hospital space has uh you know we now have had a number of successful go lives uh and those customers are ready to talk about their successes so so that's another factor right it gives us sort of we think it's it's going to unleash the next wave of pharmacy expansion so so all in all we're sort of looking across the landscape and saying okay we know there's a lot of political noise going on a lot of sort of uh complex issues in supply chain spinning out of that, but the marketplaces that we serve seem ready to roll and the pipeline looks ready for a pretty good year.

That's a helpful color. I also want to touch on the pro-services trend that you guys saw during the quarter. Can you provide some color on what you've seen there with respect to ongoing implementation and delivery timeframes. Is there any notable difference between your internal pro services capabilities versus the deals that are being partner-led?

Yeah, I mean, some of this has just been, I mean, there's an ebb and flow that goes on here. I mean, our partners continue to do well. You know, Rise now continues to expand their business around our platform. You know, we've got ongoing relationships with Avalon and, you know, Deloitte and others. But, you know, again, lumpy deals can drive pretty big swings in professional services and professional services backlogs. And the profitability of American hospital networks also drive a pretty significant swing there. So, you know, calendar 23, most U.S. hospitals lost money. They had very little money to spend in calendar 24. They made money in calendar 24. So now in calendar 25, they've got more money to spend. So they're funding more projects. They're moving more quickly with their implementations. They're hiring bigger teams. that's driving this sort of expansion in the pro services backlog. But, I mean, we don't expect, I mean, you know, as you can see, I mean, the pro services number this quarter was up, you know, 20% over the same quarter last year. We don't expect that level to, you know, we don't expect to continue to grow at 20%. I mean, we expect strong numbers this year in pro services, but if I look over the next three years, I think you're going to see pro services revert back to, I don't know what mark, what high single digits, something like that.

Yeah, mid-high. Yeah. Okay.

Thank you. And more broadly, just on partners, how has partner engagement been trending to date, and what do you expect from the partner channel this year in terms of their contributions?

Partner engagement has remained pretty consistent. I mean, if you look at our pipeline, I mean, we're continuing to run with, you know, even as the pipeline expands, we continue to see 25 to 30% of our pipeline is what we call partner influenced. So, I mean, what that tells you is we continue to lead the charge in most cases. in terms of finding the opportunity, getting it into the pipeline, and bringing it through to a conclusion. We would like to see the partner influence pipeline get closer to the 50% level, but so far over the last couple of years, it's remained in that 25% to 30% range. Now, as I say, the pipeline has grown significantly. I mean, our pipeline is roughly double what it was 18 to 24 months ago. So the pipeline's grown pretty significantly, which means the partner piece has also grown significantly, but as a slice of the total pie, it's remained in that 25 to 30% range.

Okay, perfect. Thank you for taking my questions. I'll pass the line. Thank you. Thanks so much.

Thank you. There are no further questions at this time. Please proceed.

Great. Thank you. Well, thank you, everyone, for joining us for this update on Q1. And as always, if you have additional questions, please don't hesitate to reach out to Mark or myself. And we will look forward to speaking to you at the end of November for the release of our Q2 results. Thanks. Have a great day. Bye for now.

Thank you, ladies and gentlemen. The conference has now ended. Thank you all for joining in. We all disconnect our lines.