Wishpond Technologies Ltd.

Thank you everyone for joining us today and welcome to Wishpond's 2024 Fiscal First Quarter Financial Results Conference Call. My name is Adrian Lim, Group Controller, and joining me on the call today are Ali Tashkandar, Chairman, Founder, and CEO of Wishpond, and David Pace, the company's CFO. This call is being recorded. We will be having a question and answer session at the end of the call, which will be limited to analysts only. I trust that everyone has received a copy of our financial results press release that was issued earlier today. Listeners are also encouraged to download a copy of our quarterly financial statements and management discussion and analysis from cedarplus.ca. Please note portions of today's call other than historical performance include statements of forward looking information within the meaning of applicable securities laws. These statements are made under the safe harbor provision of those laws. Please refer to today's press release and in our management discussion and analysis for disclosure of risks and uncertainties. We provide forward looking statements solely for the purpose of providing information about management's current expectations and plans relating to the future. we do not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements and to reflect any change in our expectations or any change in events conditions assumptions or circumstances on which any such statement is based except if it is required by law We use terms such as adjusted EBITDA, annualized revenue run rate, and monthly recurring revenue on this conference call, which are non-IFRS and non-GAAP measures. For information on how we define these terms, please refer to the definition set out in our management discussion and analysis. And with that, let me turn the call over to Mr. Ali Tavskandar, Chairman and CEO.

Thank you very much, Adrian. Good day, everyone. We truly appreciate everyone for joining us today. On today's call, I will first provide some general commentary and an update on the first quarter ended March 31st, 2024, followed by our CFO, David Pace, who will provide a financial summary of our quarterly results. I will then come back and provide some commentary on our outlook. First quarter of 2024 marked another historic chapter in the company's history as we successfully completed the development of our flagship and much anticipated Sales Closer AI product, which subsequently launched in April 2024. Sales Closer AI has generated immense interest within the industry as we pioneered the future of sales calls and product demos through the use of an artificial intelligence agent. With the combination of Propel IQ and Sales Closer AI, Wishbone is poised for its next phase of growth. Propel IQ establishes us as a front runner among a select group of digital marketing companies, offering an all-in-one bundled sales and marketing platform. We are also confident that our Sales Closer AI product will lead the charge in reshaping how companies engage with their stakeholders, heralding a new era of efficiency and effectiveness in sales processes. Turning to our financial results, I'm very pleased with our record first quarter. Wishbone achieved revenues of $6.1 million in Q1 2024, representing approximately over $24 million of annualized revenue run rate. This growth has been driven by the company's focus on organic growth and successful market positioning. We're thrilled to report an 8% year-over-year revenue growth in Q1 2024 with stable performance quarter-over-quarter, a particularly exciting achievement considering the typical seasonal downturn expected of this quarter compared to Q4. In the first quarter, we maintained our streak of achieving positive adjusted EBITDA for the seventh consecutive quarter and we achieved a 39% improvement in adjusted EBITDA compared to Q1 of last year. This improvement stems from the sustained momentum of our cost optimization initiatives initiated last year, coupled with the ongoing growth of our various product lines. The company's outlook for the remainder of 2024 is incredibly promising as the transition of our sales team to focus on Propel IQ in Q4 2023 will start bearing fruit. Our cash position should improve in 2024 as a result of higher revenues and because the company has completely paid out all of its earn outs related to prior acquisitions, which David will discuss in further detail. We are confident in our ability to fuel the company's future growth through operational cash flow and our $6 million credit facility, with future financings earmarked primarily for seizing acquisition opportunities. I will provide additional details on our output later on the call, but first I would like to turn it over to our CFO, David, who will review the financial results for the year.

Thank you, Ali, and thanks, everyone, for joining us on the call this morning. I'm pleased to report that we have achieved strong results in revenue, gross profit, and adjusted EBITDA for the quarter ended March 31, 2024. Wishpond achieved quarterly revenue of $6.1 million during Q1 2024 compared to $5.6 million in Q1 2023, an increase of 8%. Revenue growth was primarily driven by stronger product demand, an increase in sales and marketing activities, and new product introductions. The revenue from a legacy customer reduced from $525,000 in Q1 2023 to $268,000 in Q1 2024. Without this decrease in revenue from email delivery services, Revenue from the rest of the business would have increased by 13%. Wishbone achieved record gross profit of $4.1 million in Q1 2024 compared to $3.7 million in Q1 2023, representing a 12% increase, which was driven by an increase in overall revenue. Wishpond achieved a gross margin percentage of 68% during Q1 2024 compared to 66% in Q1 2023 and in line with the company's historical performance. During Q1 2024, Wishpond achieved adjusted EBITDA of $290,000 compared to $209,000 in Q1 2023, an increase of 39%. As at March 31, 2024, Wishpond had $2.1 million of cash and debt of $2 million from its bank credit facility. This compares to $1.4 million in cash and debt of $995,000 at December 31, 2023. The reduction in cash net of credit facility balances was caused in part by earn out payments for previously acquired businesses, investment in the business, and changes in working capital. I'm pleased to report that in Q1 2024, we made a final earn out payment related to an acquisition that we completed in 2022. In Q1 2024, we made an earn out payment of $99,000, which compares to cash earn out payments of $371,000 in Q1 2023 and $815,000 in Q1 of 2022. We now have no more earn out commitments and expect our cash position to be favorably impacted in the remainder of the year. Furthermore, in the first half of the year, Wishpond incurs several costs such as compliance costs and some cash and tax payments that do not recur in the second half. This will also have a positive impact on cash in the second half of the year. Wishpond has a $6 million secured revolving operating credit facility with National Bank of Canada's Technology and Innovation Banking Group. While we had an overall net positive cash position at the end of this quarter, we drew from our credit facility for working capital purposes as the company's cash is held in several accounts. Although we are expecting our cash balance to improve in the second half of 2024, we also have undrawn capacity on our credit facility if needed in the future. Last year, the company underwent a cost-cutting program, which included headcount productions and the implementation of AI technologies to improve internal processes. Wishpond has strong monthly recurring revenue and very good visibility of revenue and cashflow. Wishpond is able to continue growing comfortably from its cashflow from operations without the need for any additional equity or debt capital raises. At the end of the first quarter on March 31, 2024, the company had 54,033,620 fully diluted securities issued and outstanding. This concludes my financial update, and I will turn the call back over to Ali.

Thank you, David. There are two main things that I want to focus on. The first, Propel IQ, and secondly, Sales Closer AI. Last year, we announced the launch of Propel IQ, Wishbone's next-generation marketing technology platform. Propel IQ is redefining the landscape of digital marketing and puts Wishbone on track for its next stage of growth. Propel IQ is our most extensive platform offered to date, combining Wishbone's award-winning software with its recent acquisitions to create one connected platform. In addition to Wishbone's AI-powered website builder, lead generation, email marketing, automation, and marketing technology solutions, Propel IQ includes SMS marketing from Winback, referral marketing from Viraloops, AI-powered Braxy from Brax, and sales engagement software from PersistIQ, all integrated together into one platform. With Propel IQ, businesses will be able to manage the complete customer lifecycle in one platform, eliminating the need to pay for additional marketing and sales tools. On March 5th, 2024, the company provided an update on several key metrics for Propel IQ. Since launch, the number of Propel IQ customers has increased to over 500 users. Now we're representing more than 10% of Wishbone's total customer base. Monthly recurring revenue, or MRR, from Propel IQ customers has increased approximately tenfold over the past year. Wishpond expects Propel IQ's gross margins will exceed 80%, a large improvement from the company's traditional gross margin range of 65 to 70%. The customer churn rate for Propel IQ customers is up to 40% lower compared to customers of other Wishpond solutions. Customer lifetime value or LTV is over 20% higher for Propel IQ than customers of other Wishbone solutions. The number of sales account executives on our Propel IQ team has remained relatively stable since the beginning of the year. We remain focused on increasing the productivity and efficiency of our account executives in selling Propel IQ. We expect to start adding more account executives in the second half of the year. Hamed Nademiya, PropelIQ is the future for Wishbone and we believe that the platform will give us deeper integration into the client's business and marketing systems, increasing our customer retention and long term customer value. Moreover, through the PropelIQ platform, we expect to further increase Wishbone's margins. Hamed Nademiya, I would now like to talk about our AI initiatives. AI will have a profound impact on the way sales and marketing is done in the future. The use of AI technologies is rapidly changing the digital marketing landscape and Wishbone is at the forefront of utilizing these new innovations to provide SMBs with new advantages against larger competitors. I believe that artificial intelligence technology truly has the potential to disrupt much of the way people and businesses operate, and I firmly believe many AI applications are here to stay and will revolutionize the marketing industry. Over the past 18 months, We announced the launch of several AI tools for marketing, including the AI Website Builder, Sales Email AI, Raxi's AI Platform, and our most recent launch of Sales Closer AI. Wishbone's website builder, which is powered by generative AI technologies, leverages the latest generative AI technology to analyze user inputs and automatically generate website designs that are tailored to the user's specific needs. To create a website using the website builder, entrepreneurs and business owners simply enter a few details about their business and the system's AI algorithms will generate high quality content and imagery using the information provided. The website builder further allows users with the ability to edit and refine their website using AI technologies, including the ability to translate the website into multiple languages. Another AI-powered product we launched last year was Sales Email AI. Engineered to deliver tailored responses to emails from potential clients, Sales Email AI provides users with a level of personalization that sets it apart from traditional automated responses, allowing users to elevate and streamline sales communications. Previously, we also announced that Brax.io, our fully owned subsidiary, had launched Braxy. Braxy's AI platform automatically creates and optimizes campaigns, enabling businesses to attract more customers in less time. With Braxy, businesses can craft ads targeting precise customer profiles, enhancing their chances of converting leads. We believe that utilizing Braxy will yield significantly better results compared to managing Google Ads manually and at a fraction of the cost of hiring a full service agency. Combined with our recently launched Sales Poser AI, which I will talk about in more detail shortly, these components are a part of our expanding AI product suite. It represents our vision of a comprehensive lineup of AI-powered marketing tools tailored to our Coppel IQ platform. These tools are being crafted to provide an automated end-to-end marketing pathway seamlessly guiding users from lead generation to sales closure and thereafter to customer support and service. By leveraging our automated tools, clients can efficiently scale and nurture the businesses in a cost-effective manner, thereby fostering growth and success. Looking forward, there are numerous use cases of AI in marketing that we intend to launch in the future, including AI can be used to generate personalized content for newsletters, websites, emails, and SMS messages. AI can help SMBs provide more background information on the leads in their prospect funnel. And AI can be used to produce professional promotional videos that would otherwise be expensive for an SMB to produce. These are just some of the exciting developments that are taking place at Wishbond. We are in a very fortunate position to be able to lead the charge in applying AI to marketing applications and to provide our clients with powerful tools that will help them grow their businesses more efficiently and profitably than was ever possible in the past. Moving on to Sales Closer AI. Sales Closer AI contributes to our expanding suite of AI-driven products, aligning seamlessly with our vision to empower businesses of all sizes to scale efficiently and accomplish more with fewer resources. Here are some of the milestones we achieved for Sales Closer AI. On April 4th, 2024, the company announced the official launch of its proprietary AI-powered sales platform, Sales Closer AI, that the company anticipates will be able to deliver personalized round-the-clock sales calls and product demos just like a next-generation virtual sales agent. The platform can work 24-7 to engage leads, close deals, and deliver insights in 10 different languages. Sales Closer can also be adapted for use across a diverse range of industries, such as software, SaaS, professional services, financial services, education, travel and hospitality, insurance, car dealerships, and more. Sales closure transcends the historical constraints that have long plagued SMBs, particularly in the realm of sales. These encompass language barriers and time zone disparities when dealing with international clients, as well as the scarcity of time or sales personnel available to commit to sales meetings. Previously, these challenges often led to missed opportunities or slower growth. However, sales closure empowers businesses to automate their sales processes, effectively overcoming these obstacles and enabling seamless sales interactions. This innovative AI-based platform can act as a virtual AI representative and can engage in conversations and deliver presentations in real time through various meeting applications. Once a customer provides Wishbone with relevant knowledge base for upload, the custom trained AI can conduct sales presentations tailored to that business and can manage the entire sales process from discovery to close with minimal need for human intervention. As a result, the platform allows businesses to automate tasks, scale their sales team, and sell globally, all with detailed analytics to enable continuous improvements. Sales Closer can also be adapted to different customer applications. Some other potential uses for Sales Closer include AI products designed to function as sales development representatives, product trainers, customer support agents, product onboarding specialists, or customer success representatives. Wishbone also believes that there are further use cases for sales closures, such as market research and data collection, translation services, hiring and recruiting, autoresponders, secretarial work, and education. As we continue to engage with more clients on the product, we anticipate the emergence of unforeseen and innovative use cases. While still early days, the feedback from our initial customers on Sales Closer has been incredibly encouraging. We are targeting specific vertical markets for Sales Closer, such as auto dealerships, software companies, insurance companies, and equipment sales. Our pipeline is starting to grow, and we're seeing that Sales Closer has broader appeal beyond the SMB market. Our monthly recurring revenue, or MRR, for Sales Closer is also higher than our current Propel IQ product offering. We believe Sales Closer will have a positive impact on our MRR in the future. In addition, we see an enormous opportunity to use Sales Closer for our own wishbone sales. We have actually closed some sales of Propel IQ using virtual sales agents with no human intervention. We have been using Sales Closer for handling overflow of bookings from live human from live human calls. Sorry, just one second. We have been using Sales Closer for handling overflow bookings from live human agents and for geographic areas that we don't currently serve very well. We are finding that Sales Closer could be a great addition to our sales team. In the long run, this could allow us to scale our sales efforts substantially without the typical impact on cash. This is an extremely exciting possibility for us as it will allow us to expand our hours of sales coverage and the geographic regions where we can sell our Wishbone products. We are on track to achieving all of our key four objectives of the year. One, accelerate organic revenue growth and increase monthly recurring revenue, MRR. Two, achieve positive adjusted EBITDA in each quarter in 2024. Three, leverage the Propel IQ platform to improve margins, decrease churn, and increase long-term customer value. And four, ramp up sales of the new Sales Closer AI product. Which one's outlook for the remainder of 2024 remains strong and positive? Which one is well positioned for continued growth and improving profitability? We anticipate strong revenue growth in the back half of 2024 revenue, primarily due to the momentum gained from Propel IQ and introduction of Sales Closer AI. The prospect of maintaining stability in our top-line revenue is particularly thrilling as it sets a foundation for continued growth during the second half of the year where we have our traditionally stronger quarters. Wishbone expects to achieve record revenue and positive cash flows in 2024. This is driven by organic growth from ramping up sales of the company's new Propel IQ bundled product offerings, increasing the size of its sales team, and new product introductions like Sales Closer AI. Wishpond continues to experience strong demand for its products. I'm especially optimistic about the future blue sky potential of Sales Closer AI, which truly has the opportunity to be a game changer for our customers. We expect to be adjusted even a positive in each quarter going forward in line with the company's focus on profitable growth, which one will continue to scrutinize all discretionary expenditures across the organization with the intent of optimizing operations and achieving cost-saving synergies. With the launch of Propel IQ and Salesforce AI, we're expecting higher gross margins and lower customer churn rates going forward. Clients are increasingly signing up for annual 12-month terms. Propel IQ improves the stickiness of our platform and aids in retaining customers for longer periods of time. The bundled pricing of Propel IQ is expected to result in greater customer satisfaction, less churn, and consequently higher customer retention. Which one can continue to fund the growth of its sales team and new product launches from cash flows from operations without having to raise additional equity or debt capital? The cash flows generated by the company will continue to be reinvested in the business, primarily in new product introductions and ramping up sales and marketing. Which one may raise capital in the future for the purposes of future acquisitions or to accelerate organic growth? In closing, I want to reiterate that Wishpond is an elite software company with profitable growth. Technology companies are known to burn lots of cash for many years before becoming cash flow positive. It is rare to find a software company of our size that is growing rapidly, maintains gross margins of over 65%, and is also adjusted to be positive. Wishpond truly is a unique, high growth, profitable company, and we remain committed to delivering profitable growth in the future. Wishbone today is in an enviable position with a growing customer base, increasing revenue, broadened product offerings, and positive EBITDA. I'm proud of what we have accomplished, and I'm excited with our future plans. Finally, I want to thank the entire team at Wishbone whose hard work continues to elevate the company to higher levels. We want to thank our customers who rely on us to help them with their digital marketing needs. And also, I want to thank all of you for joining us on this call today. We look forward to providing an update next quarter. I will now hand it back to Adrian for questions.

Thanks, Ali. With that, we will now open the call to questions. Just a friendly reminder that questions will be limited to analysts only. The first question is from Gianluca Tucci of Haywood Securities. Please go ahead.

Hi, good afternoon, guys, and congrats on the quarter. Good quarter. Pretty good gross margin expansion in Q1. Is this just a factor of higher propeller Q sales, or are there other moving parts here? And how do you see the margin profile playing out this year, given that sales closer AI is hitting the market post Q1?

Yeah, very good question. So we overall expect the gross margins to improve. And as we said, Propel IQ, we expect it to have gross margins of above 80%. Sales closer, we expect it to be above that, you know, maybe even higher, but we want to kind of remain agile in terms of our pricing options in case we do need to provide different pricing options or discounts as customers scale. Having said that, going from 65%, 66 and 68%, one quarter to next, there are going to be fluctuations quarter to quarter. And I don't want to set the expectation that every quarter is going to be straight line going up. I think Overall, the trajectory will be positive, as we talked about, but there will be some ups and downs quarter by quarter. And with that, David, is there anything that you would like to add?

Not really, Ali. I think I agree with everything you said. Essentially, the gross margin percentages do change a little bit depending on revenue increasing. Also depends a little bit of the cost cuts that we implemented, but it's not necessarily straight line. It also depends on the mix of the different products that we're selling each quarter because some of them have different gross margin profiles.

Okay, that's good color. Thanks. And then in terms of seasonality, so far in Q1, it kind of seems like you're bucking the trend. But what can we expect from a seasonality perspective this year, Allie?

Q1, as you saw, I think given some of the growth initiatives we had, that helped us offset some of the seasonality. And I think the other part is also that large customer of ours that we talked about has become a less significant part of our revenue. And they were part of the seasonality that we have seen in the past as well. And because of that, we saw less of it. And Propel IQ and the rest of what we've added don't have that much seasonality in the same way. So that's one element of it. And I'm very happy about that, you know, more stable revenue that we had in Q1. Second half of the year is generally the stronger half for us, you know, seasonally speaking. And also in terms of, you know, as we talked about, we didn't add new salespeople. And, you know, since the beginning of the year, our focus has been on getting more productivity and more output out of the team that we have and prepare us for having more solid foundation for growth. So that means that a lot of our growth, we actually expect to come in the second half of the year and the acceleration to come then.

Okay. And then just lastly, I think you just touched on it, but from a sales head count perspective, it sounds like you're fully staffed at the moment.

We are, and we're not actively adding new team members for the remainder of Q2. I think as end of Q2 approaches, we will be looking at adding more headcount. But because of the introduction of Sales Closer, that is a dynamic that we're working actively on as well to see to what extent it can be offset using Sales Closer as opposed to adding as many headcounts as we used to in the past. And I really think that we can.

okay thanks guys i'll pass the line thank you the next question is from daniel rosenberg of paradigm capital please go ahead hi ali and david thanks for taking my question uh my first one comes around sales closer so you kind of categorized it as having immense interest i was wondering if you could provide a bit more color on you know, the types of conversations you're having, the size of the organizations you're dealing with in terms of C count or what have you. Just a little bit more context would be helpful.

Yeah, so it's been an interesting one. There has been a mix, really. We've had interest from uh software companies we've had interest from car dealerships we've had interest overseas in markets that in the past uh maybe we haven't been that active and we've had interest with um you know one person operations uh you know let's say i'll give you some specific examples you know let's say an insurance agent that wants to handle more business and wants to qualify the leads. That's an example on the lower end of it. And on the higher end of it, conversations with some universities with seeing what are the use cases where they can use Sales Closer. One of them, for example, we're exploring is using Sales Closer to help students with interview preps post-graduation. That's something that they actively work on right now. And if Sales Closer can help them with that, That would be a great thing. Or there might be an angle with international student recruitment. That's another one. Another type of conversation, for example, we're actively in is related to a number of them. But one of them that I've thought in my head, relatively larger car dealership chain, international, that it can very easily grow to be 50 to 100 seats. just one client and what it does for them is absolutely tremendous because there are a lot of calls that they receive, several hundred sales personnel that they have and the calls that they receive a lot of times none of the sales personnel are available to answer them or things go missing in that whether it's sales or service calls. now sales closer can actually pick up the slack and give them an ability to also follow up with some of the leads that they have so it's huge potential for them those are just some of the examples that you know there's also real estate agents that's another one qualifying some of the leads for them there are a few different use cases like that that we're working on what's interesting with sales closer but at the same time it takes a little bit of work initially is Some of these use cases requires to work very closely with the client and make sure, do we have the right integrations with them? Are all the elements that they need in place? And we're very active on those, but it means that, you know, initially the lift could be a little bit slower and then the potential for ramp up is really huge.

Thanks. I appreciate that. And that kind of links to my next question. It was just around, I mean, you mentioned a lot of different applications in your answer and in your preamble. In terms of standing up new use cases, I'm just wondering that the types of work involved and how you're kind of thinking about that balance between pursuing use cases where it's kind of already ready to go to market versus having to tweak and adjust, et cetera.

There are certain use cases that are more easily ready to go. For example, software companies, it's the same as the use cases that we've been handling for our own case with the Zoom calls and all that. So we're pursuing some of those and those are easier to do. But some of the other use cases, for example, the dealership one that I mentioned, is an example where a sales closer also needs to make live API calls to check the product inventory or check appointment availability. And those things, they're not really industry specific. It's more of a capability that, oh, okay, that actually would be very interesting and opens for a bunch of new opportunities for us. So let's quickly add that in. None of them are difficult for us to do. And I think, Amit Singer- Where we are with sales closer right now is still exploring what are all the opportunities and where we should invest most of our attention and which of these vertical you should pursue most strongly.

Amit Singer- and understood and then just one financial one for David you mentioned. There were some impacts on cash flow, the earn out, but also some one time things like taxes, could you give us a sense of. You know how much that impacted you and how we should be thinking about the cash flow trajectory this year.

Sure. So the first six of the months of the year, we typically have things that don't recur on the second half. So specific examples would be audit fees, tax return fees, AGM fees. You know, there's some GST remittances and EHT remittances. So the different tax payments and so on and so forth. So the amount is quite high, actually. So the first six months of the year, you know, it's between anywhere between $800,000 to $1 million. And That typically doesn't recur in the second half.

Great. Thanks for taking my questions. Sure. Thank you.

The next question is from Gabriel Leung of Beacon Securities. Please go ahead.

Hey guys, thanks for taking my questions. Just looking at Propel IQ for a second, Ali, I think in one of the slides you talked about, do you think the remaining sort of 90% that's not using it are addressable? Or have you found that, you know, with over a year of selling Propel that there's certain characteristics of a customer that will likely buy Propel versus, you know, traditional or point solutions?

I think there's a bit of both. So there are some angles that now we're actually actively working on training the non-Propel IQ sales people within the company to also be familiar and be able to sell Propel IQ. So that I think has been part of it. And that's happening right now. Some of those clients, I think, can benefit from Propel IQ as is, but there is also an element of some of them, when they signed up, they might have signed up because of very specific need that, let's say, Propel, sorry, Persist IQ addresses or, you know, Brax addresses, and they weren't really thinking about more of the self-serve offering that Propel IQ is. So because of that, to some extent, we haven't really bothered the clients with a lot of migrating them. And some of those ARPUs, average revenue per customer per month, actually has been higher than Propel IQ starting price. So we've kind of let them be in more, been more focused on new customer additions for Propel IQ so far.

That's great. And actually, going back to that point about monthly ARPUs, can you talk to us about what the starting monthly ARPUs are looking like for Propel versus what have been your traditional ARPUs? traditional customer and also where you're seeing sales closer, where that price point per seat you think is going to shake out as customers start to line up for bigger deployments?

David, you might want to take it and if there's anything more I'll add.

Yeah, so typically the Propel IQ ARPU is a little lower. Across the different product lines, we see ARPUs anywhere from $300 to $3,000. I mean, you may have persist customers easily at $1,000 to $2,000 and across different products like Brax and Envigo, they either higher or lower. The 2.0 typically start a little lower, $300. Propel IQ? Yeah, Propel IQ, 2.0 Propel IQ. Basically, they start a little lower, but we also add on. Sometimes they want some specific service that they want added on to that. So basically, Ali mentioned, sometimes there's a different mix there in terms of what they need and what we need to give them to get them started up. So depending on that, we can add on a couple of different things in terms of services to get them ready.

That's right. So for Propella IQ, one thing is the starting points of $300 per month USD, so $400, versus the blended average of all the other products. Alcoa is a $500 starting point Canadian. So let's say $400 compared to about $600 Canadian. That would be the comparison of the starting point. With Propel IQ, there are two other elements though. One is per lead pricing. So as they go over the $1,000 leads allotted in their plan, then they pay a per lead component and some clients actually end up paying more. That helps. The second element that we've done to some extent, but now actually we're putting increased focus on it, is some of these clients, even though we give them the self-serve product, at least initially they do need more handholding and service element in the first three months, six months, something like that. And, you know, so we provide them with what we call flex plans that, okay, you have certain number of credits or budget to use different services that we provide. And that also helps increase revenue for us and the average, you know, the ARPU for Propel IQ as well going forward.

And on a sales folder, any any thoughts around that updated thoughts around pricing on that?

Yeah. So, yeah, yeah. I'm glad I actually brought that up. I think we made some changes to sales closer pricing since the last conversation. We were starting to experiment with having a free tier for people to come in and. have you know one hour usage of sales closer over the month and and you know expand from there what we realized was that uh that was kind of inconsistent with the sales methodology that we have and we you know we we stopped that we put that on hold for now and people need to receive a demo sometimes actually the first time with buy sales closer of sales closer um and the prices you know typically are $1,000 per seat, we do have the option of going down to 500. If it's a smaller client, and you know, $1,000 doesn't make sense. But a lot of the cases that I'm seeing deals that are being worked on, start at $1,000 per seat and go up. And we've had a number of deals that have already been closed and are actively using sales closer. So just expanding from there.

Thanks for feedback.

No problem.

The next question is from Jason Zandberg of PI Financial. Please go ahead.

Thanks for taking my call or my questions. First of all, just congratulating for the quarter, especially on the growth margins and the EBITDA line. I just wanted to ask about your credit facility. So you dipped a little bit more into the credit facility this quarter. David, you'd mentioned that there's some front end expenses in the first half of the year as opposed to second half. So I guess my question is, do you expect to go a bit further into that credit line before you start to repay that line? Or what's the outlook in terms of that credit line? I know you've still got $4 million or so left on that line, but just kind of want to get some color on what you expect that will look like this year.

Thanks, Jason. So, yeah, so basically the cash balance at the end of the quarter was significantly higher. So, again, if you compare the December 31 to cash balances and LLC compared to the March 31. Yes, the LLC balance did go up, but the cash balance was also higher. And really what happens typically is we have different bank accounts across the different products. And so as Stripe keeps getting the cash in from the customers, those balances sit sometimes in the Stripe accounts before they're remitted into our NBC accounts. And even within NBC, we have different bank accounts for the different products, which is all to say that we have one LOC line. And if there's a little less cash in the central bank account, then we sweep out from the LLC line to pay for day-to-day expenses until we move the cash from the other accounts back into the central account and then pay down the llc so to give you an example you know the llc right now is like a million dollars it's basically half of that didn't mean that our cash balance has fluctuated wildly all it meant is that there was some cash sitting in other accounts we used the llc then we paid down the llc and typically over the course of the you know week by week or month by month um actually not so much month by month but depending on the day of the week you may have a slightly higher llc balance and it may be paid out three days later or something like that. So, yes, you know, it was high at the end of the month. That actually that number is actually an anomaly. It's slightly higher than it's ever been. And since March 31, we've actually paid it down significantly.

OK, no, that's that's great. Great to know. The other question I have is just with regards to when your comments on the quarter and you mentioned that you know, Propel IQ customers had 30 to 40% lower return rate in some cohorts compared to customers of other waste solutions. I want to get some color around what was meant by some cohort. Is that some specific customers or more color would be great on that.

Um, I don't think some cohorts is, uh, if we said some cohorts, I think, uh, maybe we need to clarify it. It's not really some cohorts. What we mean is that we did cohort analysis of legacy customers versus Propel IQ customers. And by cohort analysis, meaning that, uh, if we look at net churn, right now of Propel IQ versus the rest of the business it is not really apples to apples because you know they might be newer they might not really be in the same life cycle you know that number can be affected by new sales a lot of those things so the the the most comparable way is actually a cohort analysis meaning that look at people in their first month after starting with us on ProfileIQ and compare that to people on their first month for the rest of our business. And what is that churn, this one compared to that one? And do the same thing for second month, third month, fourth month, all the way to 12 months. And that gives you a very good idea of what is the churn profile actually, right? So then that is apples to apples. So that's what we mean. That is the comparison that we made.

Yeah, so that's some clarity to that. Thank you very much. No problem.

Looks like there are no further questions. We now pass the call back to Ali Tazkandar for closing remarks.

Thank you very much. Once again, I want to thank everyone for joining us on the call today. Thank you for the analysts for your questions. Everyone, please stay safe and healthy. We look forward to providing more updates this year. Thank you.