Quest Resource Holding (QRHC) 7 Nov 242024 Q3 Earnings call transcript

Good afternoon, ladies and gentlemen, and welcome to the Quest Resource Holding Corp.

Third Quarter 2024 Earnings Call. [Operator Instructions] This call is being recorded on Thursday, November 7, 2024. I would now like to turn the call over to David Mossberg, Investor Relations. Please go ahead.

Thank you, Andrew, and thank you, everyone, for joining us on the call.

of like predictions, everyone statements estimates events, future I'd call this regarding begin, or contain may and performance we to that remind conference future Before Quest. other forward-looking project, Use of similar are to intended expect, believe those statements. and expressions forward-looking estimate, identify words other intend, anticipate, like Quest's are projections, expectations, beliefs risks and forward-looking statements current significant uncertainties. Such assumptions and based on estimates, and involve factors, discussed which Quest's Exchange results discussed the result could in those the or from a with forward-looking events detail Actual of Commission. greater materially various are in filings in as statements differ Quest's and Securities

You date SEC are by to filings made, any duty and reliance presented such Quest's undue our risks statements additional are on uncertainties. we unless so and disclaim such cautioned do not update required to for forward-looking law. to consult the and statements, of to statements place as

observations other publications, conditions firms data In as sources. information and well addition, other and and independent data on industry in are Quest's market by reports market publications views and include the this based we Quest's information, statistical developments. may The and estimates, about government and call, as research and industry

are Executive results the a measures measures are non-GAAP the the prospects evaluate reliability discussed presentation stated, These is be strategic reconciliations otherwise Quest be Hatch, reliable all these over release. With and non-GAAP by Chief that and future it financial these Unless other sources turn call included the management basis. today's on forecast I'll used believes company's non-GAAP call. is are ongoing measures non-GAAP data of are financials information to investors' the this and said, President understanding during call it to Although assessment financial and core discussed current and to of believes future. not performance. that that this be Ray any operations make decisions, useful Officer. company's in Management GAAP independently of now to Quest assumed Full financial earnings will non-GAAP accurate, will measures should the sources that and in caution the we and does verify the information. Certain the for of

and all you, on today's Thank you joining for thank call. us Dave,

by did Our costs for industrial had growth despite technology show the end the muted results new financial by record the temporary market. third client anticipated. experienced our quarter being growth enhancements that the level not disappointed in and we and outcome platform, increase of clients economic the that to in have results a been I'm headwinds

to engine the growth financial of While We organic it's all fundamentals cylinders. hitting of see of yet not we strong, how pipeline and the the can see the company. future are about excited can size apparent We incredibly growth see and in results. consistently technology business can implementation same the on than have at the results, that remain But efficiency scalable the frustrated our we platform, fundamental a the is demonstrate events, which is progressing and have as one-off the gains. impacted been our continue nature, time, beginning build we to ability of in more in periodic to most demonstrate financial improvements the we're

come. rate, XX% new to rapid in a new the to financial disappointing fully to of having With our added for ramp outlook our in to that despite as contribution challenges success we've continues And during source position company be strong. driving ramped the continue contribution off have confident expected from of is will year clients company third business. be from growth from growth existing expected. added the revenue clients overcome from quarter come run better embedded our contribution future. The through this the clients the the just company significant X Revenue year-to-date that and new the are at should quarters the efficiencies the results, We continued for and

our and we In significant to and to the prior in year. strengthen benefit complete operating our now continue be rates to review back in over refinancing a I'll in and the from financials, expect strategic of call and turn Brett addition, the so, improved to to we efficiency overall of to you our our leverage balance review drive reduction give expect Johnston, continued also to should a initiatives the in our to improvements interest sheet, to terms. I'll profitability. work on debt initiatives. doing We've end And CFO,

was second quarter. Revenue quarter and afternoon, year-over-year to mostly third growth sequentially for everyone. had from strong increase and X.X% Thanks, accounted existing roughly revenue. and which flat discussed Ray, to of clients, record services was activity level We related increase as that significant half, $XX.X clients million, This on and X rollout calls. The $XX the a the a first significant good new million expanded on well from with client secured of during that have track. the onboarding agreements existing clients from of X previous wins have expansions is new we new as

anticipated secured rate the run clients quarter. generated during year XXXX approximately New third during full XX% of their revenue

approximate in We an our offset client conditions expect market another and than experienced to both growth more to volumes revenue these in gross million wins had services. profit clients, due attrition. dollars sequential significant by softer-than-expected rollout we in was optimize client decrease referred industrial as provide complete $XX anticipated. last and we those clients that and revenue incremental the certain quarter what we Among large decrease, at a to at Growth end industrial

is client the are in the previously, with services slowing them this to which there add affect strong, to are long the term. said term. production for likely They now, for be with we opportunities As continues and volumes relationship to near

client sequential client was this higher-than-expected production had also offset relationship XXXX during The relatively comparison from we In another XXXX. changes. fluctuations growth addition, newly in added lines and very This service we volumes work client is was ramped strong. that flat by seasonal have lower-than-expected large and from revenue significantly from as project

expect into full This realize attrition. wins, new growth to future get of year as million Looking existing clients than net XXXX, from less client does XXXX, number $XX customer include to not clients revenue during more from or new we new incremental fluctuations we already revenue also a from net contribution It in anticipated or commodity due changes wins volumes. clients. not from include does signed in prices

year mix; in higher-than-anticipated three, profit two, decrease related services; one, billing factors: XX.X% was dollars to $XX.X third quarter. a a primarily in X.X% from higher-than-anticipated dollar and During of sequentially were decrease from comparisons decrease and last the the X cost The second quarter, profit gross gross revenue credits. a shift million,

the mix margin takes shift, the and we than has Regarding more to expected quarters it relationships replaced profile. revenue engagements, earlier, optimize had as was it where I by client optimized expanding from typically been the mature profile margin revenue new several less and discussed from clients where

cost costs the the from a initial both management data that relates disruption from new of can cause data system, either system In client Regarding we level accurate our sales interruptions client receive vendor accelerate vendors. errors increase mainly smooth are and the the service. their management in there few service. requires to in system. vendor, the received cases, new new temporary not or making setup, To implementing ensure in a higher-than-anticipated of clients our sure in which to This transition do to automated while are implement

vendors incorrectly they we agreed of When are rates vendors action, make is that the this payment types the errors may not days example, an and reason and we up the other contractually causes implementing are potential between XX assumes that paid new pick client incorrectly to assume opposed as to Part have system have waste at time, not sure Discrepancy reduce terms disruption. the days. does vendor XX disruption. take For of to use interruption. experience higher to sometimes terms been pre-negotiated these on are not of to terms they

We made progress. have significant

far the be that forward. encouraging less This are on that rate. a is error going spend cost we So of fully QX, in operational, reduced system seeing will an sales is incremental our sign now

temporarily amount during this client onboarding make smooth there We we a clients. onboard services new sure spending more of transition as quarter. We activity record a are on to is had

we For than than began was from period onboarding same a the a quarter alone, more more X,XXX tenfold year perspective, locations. This increase the during ago.

New clients are there us sure service. to of temporary incremental in make place the interruptions this a well is while. no worth in Making lot trust investment

great how smooth As Ray across process will board has new their comment continue later, about the clients onboarding gone. to we from on receive feedback

with inaccurate credits. long-standing This In $X and billing of small sales, group which cost the million to addition profit that led higher-than-anticipated affected and the onetime shift temporary increase clients temporary billing were increase a by of isolated us to was in provided gross related had of credits. dollars approximately to information, mix

We credits of -- our in unrelated that billing to processes to this of the note is procedures tool. for implementation our I size to have automated this the should enhanced and the processing vendor future. optimize potential minimize

ago expectations. Moving $XXX,XXX million quarter, with an from line increase increase $XX.X third sequentially during of which the a but an from quarter, on to in and SG&A, was the $XXX,XXX our year of second

investments expect from improvements. process efficiencies forward, through in have gain the platform Looking we and to made we our

slower initiatives, by profit at growth savings pace offset will We a expect other we expect in these to gross SG&A and investment and partially dollars. be continued grow than

quarter. will be million $XX SG&A expect we result, a the fourth about in As

of review flows cash sheet. a and to balance on Moving

Our gave with until financing, the XXXX evaluate a with debt first and our liquidity PNC our added advisers. and is until in lenders XXXX, with In long-term us credit October the runway on potential debt Monroe quarter, we which maturity of process to of maturities run the shape. good speaking numerous of rigorous extended to April line extended

expect available of significant reduction completion million $X.X ability incremental with of to better borrowing with to the growth. equipment facility. At the $XX.X in refinancing process and and operating available maximize to nearing year, end reduction our borrowing third the the Fed had capacity We we quarter, with end our on line are the the and that a $X our terms of of million $XX by the million borrowing debt on million preserve complete costs,

third we the approximately fund $XXX,XXX For operations. used to cash quarter, in

DSOs are with We times room make progress to continue improvements. quarters shortening will increased temporary. the we still clients, that note past to but some few have our larger cash cycle some from the I in make of

our slower-than-expected we Also, the DSOs We and have in fluctuations possible especially on have the the increase in these to ramping had I'll that quarter, the $XX.X collectibility. in mid-XXs, seen million versus we clients our time that payable clients. turn great lines notes I this with beginning working payment primarily DSOs time, back PNC the related we of is but reiterate with in from year. is with At timing reflects see the want like it year, Ray. not capital. At time, end to to growth this million new borrowing The at will the relationships of $XX.X are targeted to call to the of fund

Thanks, busy We were vendor management and year. Brett. this program. level team start our for onboarding automated of I to by off thanking a and past dedication the their during activity new hard and work quarter of want very with record implementation

new to have business of onboard a the new a the as positive well. switching related Since would received said imperative the they on in the just the I exceptional. We've is team a winning our One our transitions execution we implementation live area of already bolstering last days it's new disruptions Within from smooth actually this had call, we happened. us, to has as new shared providers. Last major example feedback apprehension that that new execution how and of of helping switching potential concerns vendors. quarter, for assess went onboarding well platform, Strong clients in choice X to be so going out service well this. clients remove which client meet overwhelmingly about of very over client obstacles by technology. prospect The care of a another on overcome in our strong and efficiently to management Therefore, gone. clients reference reputation service partner our to of referred of our clients from I new volunteered they how which investments is an making and consistently by in the they're the and us were for hear A strong like help call and can execution. confidence review building and responsiveness are positive I'm only our reference, a amazed the that platform taken now to blown of what with waste clients were existing new away feedback commented how response another needs. clients our We great our team their goals. it effectively that service gives to outcomes and great we're they care that they center checked able X prospect. and their example months, in me proud this, we recycling client were of. I'll do

be for Over due helped the key a has maintain enduring enterprise. of several platform competitive that years, has able we provide. the been technology we to The client size scale will deciding incremental factor built a us platform a relationships much to and wins to value the larger

addition cost expect our the which our every in to differentiated the industry started cost We XXX% our savings the implemented, our it's fully where and industry process consistency our quarter to savings the fourth business fully reputation differentiating is matched solution Once management million believe charge We technology expect in marketplace. this in recently enhancing is that is it's invoice realize had In believe continuity. We in rate, our continuously audits new in for artificial digital first vendor agreement how discussed rules we platform. utilizing value client's that the the of we a and automated some great item previous invoices of back value to already. bolstering $X and to to latest of intelligence. vendor on level The our enhancing the line $X and recurring to proposition, enhancement platform run proposition current that first we've example is significant at our also at realize calls. by efficiencies gain is we've million

a to previous or our we're the their through technology onboarding -- that catch client of vendor years knowledge team, charge charges charge people for through were the a we allowed past we of and identified capable service. able go simply new uncovering and technology of have While prior were vendors not this followed quarter, this our removed. these passing charge did them not The industry and erroneous to that get part With it. had this was the

a Moving organic on us. front very have discussion of in the to good about we I growth. feel about growth

so, is growth, from machine, have consistently following: Over of it organic overhauled multiple past the or source year growth the our existing is and producing the growth including of we first sources clients.

which the built landfill. value with client, revenue. we're X rather expanded This half with revenue, We one able a significant more automotive figures As of the sector than minimizing large them at us to figures the we've year, annual X through is produce we of recently. X existing discussed, the first we've trust a had previously clients, the than agreements way an produce had asked waste project win another of Due for existing expected will this to to years the and to in in time, more client with offer this project. client in same they've the of help with maximize stream, to the sent volumes while to

auditable provide record their track for in Our platform allows and to also data an sustainability them use reporting. technology

is The of growth second new source clients.

discussed new history. the X client our we This for wins. of than the more our through As call, for year, ever we client we've a X total X first added Since more year. half in is of last activity new earnings significant the wins previously secured

peers that the in the live automotive standards service this we of size, with similar new Based XXX X-figure the client new service. provider several utilizing client to for of from locations. them, what not up a quality of competitor. is has heard One same on service vendor. could switched these our from prior with It's a wins client a sector And

these ones additional targets out to new reaching from win peer proactively expect that to and group. are We

is large with Second food win distribution a company.

this client months, our few market, X time, grow our just discussion. annual in in several that in food It of stages We end various end expect The encouraged Quest. pipeline have X to revenue distribution We're at account. annual this X-figure very other and and over is market we opportunity already an for should great signed produce market. up a clients a figures revenue we've first in prospects represents large to

of The this the secured of have the is growth coming we year. third from already ramp source business new

start As our of anticipate wins the We've the January revenue force, the to third approximately to of the year-to-date, well executives made sales mentioned added added we new our added before, clients sales is our we run new just December first sales onboarded. once we've quarter growth team. they was mentioned clients new way We're or full for onboarding half the I will time XX% in rate our pipeline. new annual added onboarding from leadership source the investments X are frame. Fourth proven and prospect in year, on the of in several and we

in our spend on we've closing lead such administrative more sales to addition, been as In functions operations and making generation. on allow that proposals and investments sales folks less more the time time

by shorten we've sales our developed around In quickly. turn more simplifying contracts our proposals effort to and internally made addition, to tool cycle an the using sourcing

we've result of of the not pipeline. the our efforts, a grown, As the only number, deals these but in size

to very when helping in able large of in this into we'll new the stages the pipeline consistently to can ahead. cycle I the agreements. approval, us say final large add that yield these a may opportunities the proposals and and but hesitate close, be better shorten that in progressed wins confident are clients I have As the clearly several I'm to to quarters in evidenced by converting new create investments client the year, deals to sales estimate

growth to Finally, in growth source of to but profit the related gross revenue, related dollars. directly fifth not is

optimizing the in we opportunity We dollar GP to hand. have growth have the cost business large by on drive side a

cost vendor management to through proven continued service we've dollars. our As and in we growth the bring revenue relations our optimize profit onto of to drive ability our platform, procurement gross

trajectory I success look The instructions We've Regarding sustainable and to for work on build set outlook last the is Operator? more on consistent provide The for several updated you future up how the emphasize made like we've questions. company. providing is shareholders. our a outlook growth. want for our foundation queue listeners about our to tremendous the now outlook, valued conviction our value years on our been keeping to building profitable for have to I overall progress. We'd for to over never centered confident the and clients. my and progress done services focused our on forward of business operator and can on

[Operator Instructions] is first Spychalla from Aaron question Craig-Hallum. from Your

process first in me now. there kind for operational confirm, Maybe it just quantify system. on vendor Is just the Can then of like the management there quarter? it's And of as impact the the fully you I you it error help really to fourth into And rate. sounds commentary it reduced quarter? carryover any on sounds onboard. appreciate your the mean, like the kind I should

a Brett. this On Yes, for credits, that. other difficult some directionally, because some breakouts. the Aaron, less is it we challenges million to to take other into significant on on but leads it's do enough level customer a I'll mention. to quantifying, that But getting the out little certainly $X it's called than

into point, date. do question, your feel of to just going implementation part really we terms your confident looks the of second In that on the QX, to how done

month. first already We through We've of full a the reductions rates. significant seeing error this progress good lot are in seen quarter

X, They down. So forward. Did impactful but I they less be all should answer much expect to be less costs questions? won't -- those your we do going dwindle

talked those, details the kind some investments and improve those can you kind maybe the technology where helpful. the I Like and of about where those from just a stand, just sales of those perspective? onboarding. onboarding given those And looking of kind the shortening Ray, additions gave you that's cycle to then Can stand of do on pipeline, No, mean, get today and Yes. And sales sales cycle to? force? to the of where about, talk both kind with second, then

operations say onboarding things has that's X clients, of then, by to on X significant us the now do, increased sales in sales time. We've the the this past. is on dramatically anything credit to that onboarding able bring credit sped using -- team -- team and new me, That's cycle Yes. evidence and for course, evidenced post or I the to I many bringing the the contract. the signings of our to process, as in such is never new cycle be And I that year, which proposals acceleration. excuse for will period tools a that is able is up, think I that the sales ready short we're done close that

by great significantly of the So cycle that's we've it's news. And say some sales quarter. I would which kind the a the onboarding side, great on again, back, of cut is that really results story of hidden

on feedback. You and I the but of think, it, both measure the primarily, client accuracy onboarding on speed also the

As utilizing tools onboarding we're are largely guess, in believe providers able standpoint, these locations technology and we now The firmly hundreds the have from I get the from thousands scores why a a process. was mentioned scores, of service that's in clients operationally And these I to process the new change positive getting the we're maybe before, that is and and out we've immense. years. it hundreds And and past complexity manual challenging things to equipment.

has significantly sales So as well. is I more accurate considerably think the and and cycle onboarding faster process the compressed

we're encouraged both fronts. those of So really on

might just business your election, right. things for Any impact maybe administration forward? All how then And new me. the and on last moving current thoughts

It's impact municipalities, internally up. affected which from great the Yes. Aaron. predominantly typically we managed, federal as question, themselves look the what found have area landfills are activities regulated, the aren't we specific actually, in And on that we by election a talked focus this changes. And and where you, lot most sustainability elections. most our about is What our is diversion where landfill of by show before a at we've long states

to more performance. So it's by quality investors is important driven companies decisions -- think more really federal overall, higher the for companies to programs in have the and for regulation sustainability demand whether I maintain on

long So the that's at ever. any a of changes anticipate The local higher and a to or at landfills having Aaron, level. than divert election the the really saying, levels that way is desire demand we higher don't from federal

it's tomorrow are There's there'll be less and know, there you less there to permit than difficult landfills As today. today yesterday, landfills. new than were

emphasis on and the landfill in So than and diversion less anyway. think, my I sustainability, been political past. years has it That's opinion practical is more

next Your Owen Northland Securities. Rickert from question is from

the and guys dive Or Can land bit now? you that discuss strategy? deeper did room marketing a and to expand optimized as into still sales team? the of And but that is you I grow is know team, sales there right

up being Yes. way a I SDRs, capacity we've on overall we're more reps appointments significant think front mentioned groundwork, if that. Well, I part stuff, it to and then that invested headcount, development as the a admin in we're said. creates level I think big and That focused the sales But the which will, headcount, are structuring set on and senior side Owen, team. efficiency. in of the of lot capacity you we doing added your really less sales of is said, the

So done year. added several quality along able But add or we without sales team capability capacity adding that past heads. this people you're even right we've with there, to have leadership our the experienced to

So yes, to still there's expand. room

changed. opportunities, doing just we'll right land it's and and the represent at really they continue. The salespeople You hasn't strategy well. look -- find expand experience with always you, and It's happy those right the we're to

have then anticipated rest always in X from on getting we've job. things, a spend line always the the more of existing grabbing done we One of them, and X or good

they think to have on But clients. with within the that's expansion to through a I And large clients to board seems clients, advances that purely off lately the growth of us team large When a improved my you able of and that X to credibility, can't think, national had. our almost we're have lot existing generate a with hats technology strategy talking also about. program we and the is, of launch, amazing. have clients, history positioned come kind the we've expansion announce with some it where mid-single-digit adds expansion you that really with I we've have of these months been

it. secondly the pipeline And Got then Got characterize me, it. for would you business how new just today?

real what of Owen. ago. a our I'm you The actually I spot, new pipeline year it a beyond was glad is, hoping bright That's asked. strength was for

reached Perry I the all mentioned Perry, leadership, have with like. several one things we of far in funnel, in that that with new term. what as we we X, funnel toward think where that the relatively like call, sure speaking But about, does look magnitude as the Level really happy is of the he's good have signings really the the that enough the of is what that it we're is some pipeline our have targets talked level happening Moss, funnel sales obviously we I make bottom to it's in on, it's always key feed that things what anticipate a strong middle to short that continue to but the looks moved of focused the And Perry, bottom.

your get answer beyond to I I simple at this question this a lot, I say where it So stronger. but and it's point be know would the is, continuing thought to

The next Kitt question Pinnacle is from Gregg from Family.

had this get you've time to X.X over been couple other the out thus every it years and how of we've figured a far. to the quarters invested we've So like side

for should some you some gross opportunities so, to just issues, highlighted your the for but outside profit the a that on to And get reason reverse quarter, sounds impact control touch quantified of areas have it quarter. you is Maybe disappointing like that this better. this the X

some be those be It to customers, a be that's from with of XXX believe was you clear economic some markets service well to but or Is Fortune end fair? positioned these you there's would those necessarily customers of mix slowdown loss growth of a more that an economic to service just continues The that customers. sounds that first like just at larger if customers. lines, those also in reaccelerates but -- that point not your function industrial

That's good a description, Gregg. very

so between to I We lines. any important right? loss and a share volume think draw lost distinction fluctuations, market it's haven't

I no, ride strong as that clients with growth remained in sector. ever We for that hit But Our right? when not Fortune happens. strong generated us. take our strong. are through temporary tide would and We anywhere. going They're is that restrictions levels our when the But these some, companies. get relationships with service relationship the consider they as we a these and They're impact take have them remain credit high volume going XXX sometimes,

just So a timing factor. that's

So very I is think your assessment accurate.

deemphasize could Trump any talked you probably choose that to these operations for wanting your any rather -- about have there nearshoring customers, base? my potential to within to focus customer bring companies which to you than good onshore best is if Is because benefit of some of is on onshoring, the Mexico nearshoring in President-elect has knowledge. production And don't

say, the further all I client to general, go and Yes, in going even would beneficial, onshoring it's of is whether or clients. this be

or have accurate. So don't operations in We overseas. no, Mexico you're

So that's it's any there's moved production area, of positive. not a outside trade time our

going us. XX business within be to grows U.S., or beneficial for if So there's more the within that's onshoring our the

that asked on Aaron what think a issue about So about higher costs, bit on second how then is. think this, to the little I cost

to think possible. seamless as that, I just essentially understand is that make you what as onboard as need new seamless sure as I I like transition when that, that customers, sure sounds is service you it make want to is

Is focused fair? continue -- is customers. in you continue to so, you that that new That's new I on something to the I'm saw see. something you see QX costs guess, are that onboard customers? as that you expect probably to the first And

answer that I'll Gregg, one.

it's at the on we the QX in system, bringing think doing were time, some of -- were a is challenge I more new that, record same we onboarding.

was of there kinks system kind in working So and learning a storm optimizing quarter we as the perfect the out the were it. new and

required some that. we on that. of additional you had top So and onboarding had costs then That

there stressed time. at you So areas really a couple one of

wouldn't kind future. the an So ongoing that in of I think as cost of

to to more what do was it all just were quarter. the in think uniqueness I limited of we trying the

sized but at out. enough that $X less you think Okay. Great. I material than to And call million,

quarter. call It that more Yes, was the we as get out. highlight the drag in to we point, I your to was into certainly again, nature to on a wanted temporary And it quarter. wanted it

platform the built in a scalability. we have lot of faith We and the

to expect of usage drive bring as So big -- on. we new we cost see clients wouldn't big

Okay. Great. to me. billing confusing And was then I think the on This a one third bit was bucket little credits.

to And sounds the relationship those on some like being Those were vendors. charges were it they your what responsibility kick that sounds from clients, passed was out so, which but in billed, was? Is are it to customers some the inappropriate? that issues being like it identified

got billing an No, let a It's to is that This me lot try spending that market of to a relying of a to in it's clarify much doing a it. that. pretty ton unique information. end significant to time information on nature. how And with in impact. can model, bill as this without and tenant little into information a it unique on and that's We on hard accuracy specific who a billing on relying group have the bill. isolated this and of We're detail customer structure to for But bit. get but they're us, in third-party

All of line. credits all to those that straight the -- bottom go of

around we So some accuracy wasn't extra went validate this put I verify do extra we we -- it when but robust this, enough. some -- some do it mean, -- largely a I of going vendor the help the and bigger cleanup to it diligence was overall to initiative think a some reviewed was kind did got, in contained have of issue but cleanup. tenant We for quite us billing result was extra to in just of what controls and QX we forward, through this larger processes process filters we it initially,

Okay.

customer on information And so, you you information customer, is got giving to and from bill the who right? bad if the the

correct. That's

Yes, bad or incomplete.

A Yes, it it wasn't bad. of all chunk was. obviously

Okay.

I piece came then And pocket based a the That's misinformation of customer. about. And hey, that's to try out lack or want from understand billing just so, to your some I that come guess, the confused amount information -- back I'm of to, credit your this where customer does on error. of

is we're tenant. is the the the the -- got one customer and really landlord you Well, billing

it's bill little a So the so was definition the information tenant now customer, a confusing, why So into that's -- the situation. -- billing it's of -- you're the right?

the not you based You bill company. which get was That information from is information customer, management tenants on the the your landlord, accurate.

So has associated things, to the since important from. out, significant the no was came Gregg, goods Brett we understand is, reverse It's a billed in with of as situation think cost I this credit it had to one pure reversing that impact make little more it because which revenue, inaccurately, the it's we no well, is pointing sense? And which Does COGS. it. there's is of where

So pure dollars. gross profit it's

I'm what saying? You see

Yes.

Okay.

essentially, this you case, Help landlord to recourse cost". And so you you and understand to "Hey, in you if charged this "look people the landlord say, us what, you the no does bad where have information, do me can so, go gave we inaccurately". back the to what at anything, landlord bad to gave -- information, say,

unfortunate, nothing can we Gregg. It's [ don't do, have ]. request but There's we really a

Okay.

a quarter. billing so But credits, I the fourth Yes, quarter. recur if should Okay. again not correctly, understand -- in the that disappointing

And the looking right? profit shouldn't doesn't quarter because a we're in statements fourth gross vendor in the understood quarter, that reversal those I there's quarter like that this from again, recur million sounds quarter. both sequential management Are $X some this -- on if if see at happen correctly? from should system, then the we fourth So it improvement

think are correct. directionally I those Yes.

to recurring not your Yes, point. be address they should

Okay.

come I'll Okay. If X the I there's in else hop sneak more back. queue, unless out and can somebody in

Gregg. Go ahead,

Okay. Great.

-- done think interest there year. to reduction getting that refi, some talked and end in by way On the the about about you rates of the is significant

about be? news. some Or done So could that's that good to reduction there way that's rather Is what think until wait and announced? you would

me, complete, be and are certainly I to ourselves a about structure. talk bit the challenged about for we giving the excited anything little with us in comment. improvements more without detail. think being to But we really done able wouldn't it appropriate Trust being But new just Yes. getting a deal

It the fact But detail. what be we anyway, And long, echo that but suffice comes shouldn't wanted long in said, good that able as it in available. more, feel be to more Gregg, Brett we're are about we see excitement we really and we that, -- know where give through to you added shouldn't it you say, and I yes, it information how goes. to our before we'll you get

customer there a it, in year love because this Okay. you Is -- see been love sure has DSOs, back it. be year to reason I'm and to I've unique heard get the that of would see And part on would you Brett, there's great. Great. And I ramps. say That just you to can't too. would again. no mid-XXs

so, some reason communications say historically that where with a been? than you look in are -- is you maybe there And you some what, say, know in it longer your at customers, there's you days DSOs shift and X they've just

new No, to continuously ramping. backing get customers ramping the again, -- I still new to expect out mid-XXs, expect we hopefully, back

customers, still hopeful offset. of quarter. got see is got But of that kind we muted We'll great. we've going get some this did ramping It which take piece improvement progress. a new that But some I'm by normal improvement or we you more normalized. maybe So there. good some forward saw

can them large our are end motivating well. all trying past, happy. cash year. of little good just talked to as manage of can know But the always the to or in challenging conversations be collections because We never get overall, is that we've As about have the and down a it we're when QX still what's but in, typically customers we've got flow still comes you

We have good relationships.

into some year, again. some to extended see there We making excited and have reined get improvement little a in that got next as we

just question. it one if with more I I for could open-ended think me end

stock think a that the next own forward going you or your you it you think and of the years. quarter to investors, the going But happen this, I of this will several think There And I help do. us them isn't will you I help these your accomplished what on us but lesser hopefully, happen close with And just -- the this investors this get Why now? see some are that down to why other be doesn't prepared degree? I would issues to help stock you to XX% think reflect that want after are think -- deal and XX%, kind back And is some give why of think can people resolved? remarks over issues the should vision? side. continue today. understand to obviously at to looking as business

That's Gregg. question. Yes, a big

So down break it trying to I'm into pieces.

of associated come had were of and impact of what's can't And nature of on there's industrial key the fall think -- the onboarding market buckets, credits bringing corrected. we've reflect X good our some we really a of can there. our bucket talked pretty the I challenges. was be they were tell a that and about, I clients our I costs going companies, this you have think strong strong that. Brett were those I That the items customers but expenditure making they'll controllables First lot did with a believe, of they explaining to lot The associated noncontrollables. and all, happen tell with you in with It's job the some quarter. Then controllables, in And pristine. which of couple a that faced sure an results things. back. that extra unfortunate, products, I our one-off that, with error levels that to the new service of impact

typically. only putting in once out systems that you at the I new time, with new same systems our introduce think timed which

elements to So there's amount nonrecurring a that. significant of

a tell talking associated most about all now, with controllables them We're in is, think November. I matter place. action what results fact, know and of early want in as plans and against I you QX as happened the what investors already quarter And would this to we we have of we're that. definitively, are

action corrective a lot So, has that place. taken of

marketplace. I were, these than challenges, lot. a would conversations. to We're tell I that a through and and forward So, notes we investor stronger issues, long us we've will Gregg, I these we We've during have that -- stress, standpoint like making done. We a today you, been and a lot was guys being feel just improve people in you gone lot from how have some an we're know great stronger address of and a moved with time. of it's

what So they're and this that I want know just to them went takeaway. is taken being we We can, have place address to an important and that plans the we to say extent wrong, now.

this of the But elements X customers fact confidence to is level my key don't lose nonrecurring on I we've that of really the added anybody that. high year. sight So want new

come not an formulas we've to bring superior that. what to got them. accepting of hemisphere in haven't service a that And like we've are evidenced the at been bringing same Those we're very for XXX% It's tomorrow and been table almost new the onboarding past, them We've very, rate. here. by the customers. these on where levels close looks market even bode very we've well We what the we're coming new excited customers about able that's that's to got success

high. to high profit our incremental should our be ability drive should retention be quite and So quite

never to that, We and all things. everybody. of I this. understand the and level right, have their emphasize going been want go thank activity I'm and high. earlier, been mentioned The busting I I'm closing, guess, doing disappointment. right. a I to the want ahead have And at since if to say to Quest has meeting that's that those. kind here with here I been want I'm high, very tails. few to demands frankly, jump straight the I going people forget go to they've very been So

are increase So you ever. of not changer also, as -- touch the and on the bringing results we those to it's rollout. speak. right and we been seen our efforts. And seeing I and than we're now. And customers. it's It's which for it's for in the The increase working in the I'm for those tell the accelerating. initiatives efficiencies, matter The automation well. game program, initiative place stronger signings, We're is that just zero seen all We've fact efficiencies, us taking put, few high-quality is, lever have pipeline we've place weeks, you is a thank the drive has can't last the talk. folks of G&A, the Simply grateful

doing So, for I think we're the proven. being market is is what receptive

is composite with we've optimism, that we've internally doing you our tell, growing you on basis, what some new customers is The last we're what can quarter. dramatically improved as think quite We've systems and our saw impact. some pains, had that had go-forward challenges. some I faced a But have high.

to confidence So, the that of us, in of the question. going you To your appreciative Gregg, sticking the I that, we're call. to committed to greatly hope giving of answers with that end kind everybody. we're investors, your you're with rest expecting. And results us. Thank the We're you,

disconnect for conference lines. ask We thank and please and that for today. gentlemen, call this you concludes Ladies you your participating your