E2open Parent (ETWO) 9 Jan 232023 Q3 Earnings call transcript

Greetings. Welcome to the E2open Earnings Call for Fiscal Third Quarter 2023 Conference Call. [Operator Instructions] Please note, this conference is being recorded.

I will now turn the conference over to your host, Adam Rogers.

You may begin.

everyone. afternoon, Good I'd EXopen time, welcome all you At Third like Quarter the Fiscal Call. XXXX to this to Earnings Conference Adam Investor of Rogers, at am Relations EXopen. I here Head include Chief Financial Marje Executive will Today's our Officer, comments followed our Farlekas, Armstrong. Chief call by Officer, recorded Michael from And then a call the live session. we'll open for Q&A of this available A will replay on our be call website. in the Information to eXopen.com which in Investor is section. release, access the today's replay available press is Relations listed at

today's guidance not during we like events and to EXopen fiscal These remind making to that are XXXX. And statements will fourth statements forward-looking year before we of forward-looking subject uncertainties. that be cautions these known begin, I'd and guarantees everyone performance. financial for quarter call, regarding future unknown future and and statements are fiscal performance, full including our risks

most encourage results obligating our of complete reports, finally, not recent ourselves including review information our forward-looking factors a we our or statements new stock. may to these events. our these to and or that We light or for in price results discussion are of applicable the risks market of affect you future amendments our And any revise XX-Q, or other future

website. can financial which we be refer call, earnings are viewed information today's measures downloaded during Also and additional release, of to and measures. our certain will non-GAAP non-GAAP Reconciliations certain GAAP today's Relations Investor to included press from in

by turning we'll call begin CEO, with And Farlekas. to that, the over our Michael

the of challenging results exceeded for about focus, with had our fiscal profitability providing our update quarter and subscription you, while We earnings forward sharing to our backdrop our free call. our thanks flow. We a against strong quarter revenue, to Adam, cash a We and third environment. business. and you guidance primary everyone an look joining for expanding macro third Thank continued

third on call our an and the our our platform clients detail. call, the using how update more third for previously. the in strategic will Marje we we financial investment lastly, discuss Q&A. highlights, areas FY cover are results network discussed During quarter the I'll up And open 'XX and quarter will

the generating subscription $XXX subscription Let's total XX% record quarter. of a million exceeded guidance, revenue, revenue with third revenue. strong We our a which We in quarter. begin represents had our

We profitable, track XX% a a million. continue $XX record while a In EBITDA strong This currency grown XX% for revenue, was over primary years subscription our being consistently EBITDA subscription focus, on as and translates to have public company, record constant total organic The of highly we delivering margin. rate QX profitability. basis. of over of nearly our growth revenue X the very adjusted maintaining

digits consistent the of our double of industry for of from subscription multiple offerings, have revenue more last an result our unlock we the markets our Our product the leverage for innovations a who winning. breadth and mission-critical Stated growth ways of applications. simply, geographic is and our perspective clients quarters X value in diversity the

how by examples from HUGO with logistics, ways chain The end-to-end recently illustrated platform BOSS. supply collaboration agreement and our a We Let using and of me expansive network. by what an mean to clients covers with our you of multiple providing some to visibility I win, our leader retail contract are solutions range global provide the signed supplier control.

on-time any outsourced project indicators capacity key delivery, the give capabilities. applications to collaborative agile pay This solution are and to ensuring network manufacturing. internal fashion enables and and and robust our which management leverage will BOSS and solution transformation forecast will times, secure visibility, a for performance The full cycle optimize visibility significant them and manage HUGO reduced company. Specifically, exceptional

we win new It's initiated the investment because specifically marketing to us logo of year. brought and significant earlier a this

the primary this were breadth large multiyear network factors product Our contract. in winning and

other That works includes innovator. chain HUGO that global along multiple the the a industries. wide for BOSS, agribusiness with solutions of well we On across of a contract supply our spectrum, contract, platform end-to-end a range industry signed helps also end demonstrate that

Like brought unserved existing to I'd enable recently Internet first and many clients, the new which world. live parts project, phase Amazon like QX underserved of access for with all quarters, few of satellite go-lives Kuiper's with went We a the high-speed highlight. to will and

focused working of on Cloud We paying to leader, using went go-live. $XX past our with within over year live and them planning. their supply their to for Kuiper the have network the manufacturing, Extreme partner incentives with distributors been Networks, help build million application application, collaboration EXopen's week performance chain first

on don't the entire business to international visibility. solutions offering and our payments discuss value-add and a channel greater global global these and our for repository, on future all network, eyes towards more, EXopen and metals but pricing management. are centralized An using regulation, classification is for while always platform single logistics We trade controls facilitate automatic mining export now They rebates shipments company helping calls, capabilities. have product with import a

companies next-generation provides a complete largest the project logistics supply collaboration order operational throughout control and visibility, downstream, closed-loop went Maersk's and for visibility that EXopen and increased NeoNav service decision-making through in on solution company, predictive and data in through the levels. one and single system. all live inventory The platform, of integration strategic partners the traceability offers consumer goods on of trading the objectives One real delivers world's system of a purchase chain both This customer process, control reduced a time. upstream costs multiple and collaborative

shippers this Carrier a the network November, Over capabilities, introduced part and entire shippers allows make of expanding Marketplace In expand as leverage new Carrier innovation and data help including carriers The EXopen's wins new better will proactive unlock more for we EXopen's to value opportunities, believe and our logo today, and more strategy decisions. to ecosystem. powerful broader access that both Marketplace X,XXX network the network us. carriers ecosystem. we to new marketplace to also is for addition carrier, partners strategic priority In offers client

to investing marketing; beginning to our in year: and build in I'd investment the out strategic our brand with marketing update and awareness; on progress ecosystems. Now like progress the laid systems integrator and initiative at strategic seen and good investments. our partners and sales We've our of sales we stated you against areas work the increasing brand

As evidenced in as this since client by investments, these flowing are new now through as initiating and noted top-of-funnel pipeline opportunities growth generated wins. specifically investment earlier, that

measured relatively Our in consistently area this our share success. have Even of great cohorts. as by where investments voice for or we've voice in seen now we dramatically though #X brand #X our awareness share are metrics improved modest, have been of

our front, we our both This and happen partners our making both partnership progress strategic this subscription rate work internal our that That with the areas growth are said, is building rate, growing work initiatives from with continues and not solid overnight. are focus On decoupling marks. subscription will long-term Both does services strategic growth in effect revenue. our have on hitting the ecosystem. our integrator primary of

drag SIs from these that our growth, platform, enabling by to services overall their KPMG and the will to such capacity decouple we're subscriptions business bring business. long-term on and partners extraordinary partners revenue as Accenture influencing shorter-term growth. to support This on our the design, our global means By be build unlocking a continue to and practice own subscription

few mention to like corporate I'd highlights. other a Finally,

and report initiatives. released the quarter. build EXopen on second governance its environmental, our to annual ESG in continue third We social

road can development. is software the effect Our impact clients map part end, as And enormous our distribute produce have our they products. reducing by of their ESG of environmental and an this transport to

facilitates As We the the company, this employee improve a provided campaign EXopen For EXopen Latin and donations an through sanitation of For development organization. clean water, India. to countries Water across held this and and campaign amazing in of supporting health Water matching ran and enterprise-wide end Africa People hygiene giving America, People. XXXX, X

the SaaS year with named Awards, the in innovative XXXX for we in Biz enterprise others Lastly, along top solutions. Best were SaaS of most solution

focused clients. remains on EXopen our

to growth profitable. consistent We subscription have environment, ways being multiple macro despite while And win. continue deliver we revenue highly to the

operations. are for year growth total discuss and focus and even more have economic disciplined for our to reasons that FX, in Marje targets on allows Our down flow performance come cash year in business our profitable QX and the will due us of maintain free while revenue our and expectations evidence detail. EBITDA the outlook to This focus our

last We cash free delivered for quarters. EXopen adjusted that the a EBITDA X is significant reported generates reliable growth company margins of XX% over and as margins flow. high

We long-tenured are are revenue, a consistent durable mission-critical highly software company also profitable. clients growth, with and

to the software foundation chain preeminent become world's laying are supply the company. We

We have work strategic do, on clear realize the forward. we mission as are the but our then and path opportunity to

now for communities review and our detail. X,XXX to Lastly, members and Marje? team company. nearly financial Marje our will thank to I'd in for dedication performance like our clients, excellence greater their continued our work our

hope new year. and and holiday everyone the I a had a good Thank you, Michael, afternoon, wonderful to fantastic everyone. start season

the I at First, thank wanted finance EXopen. to broader teams

Your efforts proud the to forward XXXX. get are that I'm team can working the ready to accomplish earnings together incredibly holidays I'm us of looking for me, appreciated. in much all around and through stellar we

As quarter, quarter by I fiscal results will with and today. we're reviewing with our strong guidance. Michael to begin progress our touch our to you finish on an mentioned, and integrating results. we acquisitions briefly will third our had then update then I another recent excited those share

your open will I and questions. Michael Thereafter, for the call

We will press show our website Investor the results reconciliation section I As a talk our of which basis. a eXopen.com. note, Relations to GAAP available quick release, in non-GAAP on is a in the measures about at

of foreign a we of or This adjusting pro reflecting guidance of a constant from In 'XX, third rate on $X.X of end range the exchange quarter negative forma million, growth the fiscal impact $XXX.X when on basis $XXX currency reported million. revenue X.X% fluctuations. of above basis high was year-over-year $XXX million our for an to million revenue the XX.X% organic subscription

revenue our foundation profitable subscription months grew focus 'XX, pro X In first basis. the stream of fiscal durable currency highly Delivering XX.X% and and consistent forma subscription the business. a our core the on and constant revenue of predictable is remains organic

of X.X% organic $XX on when other exchange a on a for Professional negative constant adjusting or revenue services negative pro and currency a from were fluctuations. growth reflecting X.X% negative year-over-year million, foreign basis basis impact forma an $XXX,XXX rate

focus revenue subscription a services high-margin durable stated strategy have to on over We revenue.

shifting growth. with on in our we new of to as revenues subscription strategically call, revenue In and our integrators our services expansion to have our the order of partnerships future planned earnings discussed Michael as channel system are addition, aid part previous also mentioned ecosystem we

However, our gross while QX. services expectations, is from against revenue margins our improved underperforming our services

X main key on to turn focused revenues areas to are We back growth. addressing services

acquired due certain revenues to on services that year, free has been to a last hours our cloud the clients First, earlier platform. we drag this fiscal we we service mentioned transition quarter business Logistyx, as a

as improve XXXX. to move trend the expect into and issue fiscal we this address to continue We

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there customers, beyond also X space, are are slowing macro the in projects. these items, from pausing impacts technology transformation as especially control larger Aside or select our temporarily

We expect those up the picked macro be to impacts again to normalize environment stabilizes. projects and as the

our revenues profile over our through to of issues growth couple work additive as top return to expect We quarters. to the the services next line near-term being we

pro on third forma revenue X.X% growth total $XXX.X total reported We year-over-year the organic fluctuations. a million, pro the forma constant X total rate for a $X.X adjusting 'XX, revenue of currency months X.X% reflecting revenue fiscal foreign fiscal currency exchange grew year-over-year basis the In million constant X.X% of basis basis. when a or quarter impact on on from of first negative a organic in

the was was margin gross basis. quarter basis. Our a reflecting period increase currency XX.X% the 'XX currency increase fiscal $XXX.X X.X% constant in or million X.X% forma XX.X% on the a pro on third for basis a in or quarter, a XX.X% of profit fiscal constant 'XX in on comparable third to compared Gross fiscal

are gross our walk the supplemental the slides of you These bridge now slides prepared will Relations also eXopen.com. year-over-year Investor help section impacts posted I we the to margin. to through to

gross As which bar an had approximate our you first can to represents see, on the $X the million slide negative FX, impact margin. year-over-year

not shows but this second integrator strategic impact The year million was period. to the a in which $X margin, spend system bar quarter, ago was present gross

with is million a global This and we're been and fiscal and ecosystem go-to-market in part investing the earlier, $XX for capabilities training year building mentioned as have of systems KPMG investment staff As such spend integrators 'XX. previously developing organizations disclosed Accenture.

quarter subscription revenue. our million or of for to an third a growth quarter, primarily driven XX.X% by fiscal Net 'XX compared impact was EBITDA QX the was during margin a to basis as positive 'XX of constant was EBITDA $XX.X the currency of $X fiscal million forma Adjusted increase million EBITDA third compared XX.X% XX.X% organic on margin to gross Adjusted margin a higher XX.X%. on basis. margin, prior pro in $XX.X of

The $X quarter when third our line. next million items fiscal slide to approximately details 'XX our period. EBITDA the the year compared impacting to an FX benefit was ago year-over-year EBITDA

additional during discussed the earnings natural As euro the our cost currency other largest in pound, previous have top currencies. costs we exposures, our are along hedges line call, with to and which

million second in and million in 'XX quarter. spend, fiscal internal $XX year investment integrator which for previously third spend, on bar disclosed The refers support investment slide, this the marketing the ecosystem, $X to investment totaled system

million relates million of EBITDA. XXX.X of impact $X.X improvement, the various the positive The of system $X was basic part coupled approximately and $X.XX was margin earnings adjusted third therefore, share Net margin XXXX and our with primarily Similar on adjusted is the organic to million, income our impacts outstanding. line. $X to driven margin and approximately gross cost-saving $X gross balance Net per integrators, of second OpEx quarter adjusted growth sits OpEx spend our investment initiatives. shares for million only was by million quarter, within to fiscal EBITDA, million $X

growth to cash this a for generating topic focus some want Now compounding cash free time us. core We flow on on as spend to flow. is

the free GAAP for the of have months $XXX.X that cash unlevered the with we starts adjusted to view free EBITDA providing view, X and CapEx, excluding As Adjusted normalized fiscal onetime M&A definition and been flow unlevered that a $XX.X for subtract was cash adjusted third CapEx, quarter XXXX. cash an supplement is flow million flow million that spend. first for

We already cash operating previous normalized provide cash clearer to working EBITDA. account that view view cash taxes as adjust flow to capital payments opposed and an view operating derive order net interest, in of the a takes flow, adjusted to onetime GAAP forward, cash adjusted will nonrecurring GAAP Going that cash with our the with we flow. cash M&A start and started for into

adjusted for cash flow months was fiscal for the of Our first $XX.X operating and million, QX X $XX.X was million. 'XX

to cash disclosures the to on derive done normalized have provide what in expenditures to continue CapEx similar periods we will We free flow. historical adjusted

provide cash Our million. generation flow for and adjusted nature. our cash first clarity fiscal QX acquisitive the flow months on given million for nonrecurring of was was $XX.X adjusting X free XXXX items, $XX.X more This particularly format for operating historically should

have will and the our supplemental quarterly forward. in presenting in year-to-date this view slides the going we it release We be quarter, included press

be normalized it be will be still cash in provided our adjusted flow but the will walk. still adjusted by derived easily We retiring free old minus flow the taking unlevered the EBITDA view, figure can cash that CapEx

impact cash as important a course quarterly fluctuations. have inflows on look cash out a is flow normalizing outflows cash of basis, a why rolling business, to which normal is quarterly of significant it at can differences Timing on and flows

I As for an our items. example point X flow, QX would cash out

First, it BluJay on depressed catch-up migration billings includes the collections ERP that from period. QX delayed in that

Second, interest run were to cash payments rate QX a timing cash normal QX. shift payments into of due below

rate. above will we result, a approximately see payments run $XX interest million QX normal cash As

us. a and building continue And flow levers is reiterate, be cash focus To cash will compounding finding business growth us. a a for that efficiencies for generation flow priority core generates to for additional

recent a brief update acquisitions. provide our to Now on

September integration are on of XXXX. Solutions X, that our complete BluJay We with closed

synergy surpassed $XX last target our of million. mentioned we As original quarter,

are recent million. Logistyx just combination $XX Total turning acquisition. to be synergies the projected to over related to Now still the Logistyx

to run savings expect approximately rate We rate end of by savings the and of the realize action to XX% XX% of XXXX. XX% run fiscal

the Logistyx longer slightly discussed, are previously As than taking integrations systems expected.

synergies. we remain previously the value to this additive the excited our confident achieve about are long-term ability in announced However, and of acquisition

Now on to guidance.

Our time of the earnings the year-over-year an British the headwind million, million in compared approximate million from $X to 'XX expected range now and impact approximate for We incrementally is reported GAAP $XXX fiscal have strengthened last we $XXX FX. pound million which subscription negative the an euro FX to against expect positive as be the includes now to revenue $X dollar.

Our year-over-year to is subscription X.X% of revenue range to the growth XX.X%. in organic constant expected currency be

We representing range of are the tightening adjusting million. to subscription the $X $XXX to revenue a $X million, lower basis, million end $XXX currency our constant down of GAAP range by guidance and on the guidance million,

As mentioned we closings seen deal last volatile a macro environment. quarter, to delays due in have large select

delayed, from similar as ever. QX, again mission-critical quarters and as a in While some up remains still in through picked are we're did environment as do macro some to deals coming expect QX. QX close projects of for the stabilizes We demand as the those and seeing our the carrying be delayed trend the QX platform strong

GAAP to FX $X Total million, expect is from headwind million the now for million $XX revenue year-over-year approximate an be since in reported. fiscal including the $XXX positive we range impact We $XXX an time to last negative million FX. expected approximate now of 'XX

Our X.X%. year-over-year organic total X.X% be to revenue constant expected is growth to currency

of range we're On expected a basis, down headwinds to and Most million. the to $XXX now due revision our in outlined $X end revenue is million coming lower be the services constant of tightening It currency by $XXX is million. earlier. guidance the range the $XX the million of the from adjusting to to range

base, the the at margin We're do reaffirming $XXX year, in come be our $XXX EBITDA still business, supported our our to of the of our gross FX million. evaluation $XX year, set to business beginning by expect the investment growth the headwinds future in of the of our to included in of despite business hedges operational on Despite this range to We're of but revenue. have to FX our at also our the our continued our reach is We announced expect and previously the focus additionally We're able adjusted the efficiency that top on in low likely headwinds guidance to in still to up side offset continue million cost fiscal range we're XX%. of guidance spend that which EBITDA established to approximately continuing the to non-GAAP to million for the to the provide XX% way end to the keen committed we strategic our natural of the due invest we year range. guidance guidance line. EBITDA to cost

basis. Now to a is range for 'XX quickly on year-over-year including of the $XXX the FX guidance. year-over-year fourth headwind. touch to GAAP rate $X revenue expected in This guidance a X.X% constant represents of to currency fiscal on to $XXX be million QX quarter million, subscription a range growth million X.X%

In proud year. the of the the conclusion, trajectory of for year-to-date our we're and rest we're results on

Our We have job sales our free and flow clear excited we're to aligned growth approach marketing the opportunities remain clear action front committed targeting We're also a as a North on. customers. cash Star. impacting and compounding that on incredible opportunities us about our profitability, ever-changing the plan teams the and balanced macro have of multiple to and growth in are internally navigating done improvement dynamics an growth

and to now and results begin this like next With joining I updating finishing to to session. we're that, your Q&A would look on today. everyone, We Operator, you and you, take forward the questions. strong ready progress Thank year our us Michael for quarter.

Capital. Schappel is your from first And question Loop Instructions] Mark [Operator with coming

mentioned It remarks to provide them could you if additional maybe that are with verticals. Mike, in the you on maybe deal prepared other the maybe larger smaller more be of tech bit the a color in some things respect little just verticals? delays deal color with impacting seeing delays. certain like little you, starting us Again, sounds just with a Are you or -- were starting seeing with high just you customers? might it customers, more certain sized give than like some versus

our get skews a certainly, over environment, significant news Yes. the high-tech think all become the in line. true, larger pretty And with tech choppy the the mentioned seen that's bit And transactions board. adjustments I specifically finish that it across towards harder any services. companies we around But high and to making the

We long-standing have companies. with relationships these

okay, say, they sometimes, a going bit. And we're pause to little

Logistyx transactions, see over for you'd kind that of primary the services revenue, takes finish kind and larger a mentioned. longer that the the any environment. it But of line for skews economic that's little choppy reason So get the we in it towards just to them

being Are being any Or go -- actually purchase decisions here? just just seeing delayed delayed they away? deals are you

Yes.

I go really think the deals don't away.

they in them, You you or some until period win -- you get put lose future. either off them the

You fix have for in things remember, to next XX our put the to they years. the reason software is

many we'll quarter, not say, happens. what this So times, see we'll well,

based I time. It's their don't can tackle really think on financial objectives whatever they away. just a they that So at go shopped they whatever get portent are,

So little away do them really a see push It's they going don't kind the right? we matter just to a ever. bit of of

even linearity Okay. to the just And bit delays any pretty I later throughout? you little maybe the then talk deal slowdown about Was the with quarter, was much quarter. did there. noticed or observations that it notice respect the Great. in mean a in

No.

And I of a that think It fine just start. -- little couple bit. quarter strong a the think we I quarter. had pushed we a got was things had a

choppy there's as environment entire wouldn't a of happening macro I It's see. can kind throughout anything So year. different the just happened say everybody than it's

versus us reduction then the think and should here. going how we views forward. Okay. share Great. about structure, debt one give repurchases update a you just the just give versus your -- capital company's that or maybe shifting little on, say, to And an bit gears final respect firm's M&A question, us could With

a avenue is to think we of through going kind are them. little be for we've a the range it's a that like where Obviously, spreads we'd -- little primarily Yes. build say pretty have outside to of of, said, the pause that, fair our for be our been we've to while, bit to business aggressive we period question. able have Thanks for is not of still us also But as one, environment, In Mark, current coming I that because and down. cognizant, bid-ask a on M&A. we the leverage the bit

sure we the So on. get articulated it range we into early back make we want to

you -- cohorts, look As we in think at think, our undervalued, we're marketplace. the

issuing this right be to and point shareholders. for shares for So at for wouldn't do us ourselves our

I So think, our free and cash delevering. flow generate and mostly building overall, business

is question Adam Hotchkiss next from Our with Goldman Sachs.

First, would love on we to with the integrators. deeper dig a are system little with where relationships your

is thinking revenue result as of subscription the what Sort partner could that ultimately at initial how some for likely give about programs? you're sense investment ecosystem feedback on what for will a of investments impact these the partners been scale? have a then and of us you And

Yes.

on I dig great the more opportunity other as pockets in we've areas. ones listen, think, we've find of announced. progress more made we And in, we and

their and relationships conversations -- them, and we at increasingly levels organizations. continual getting they're in happening think have with higher I So

of in are, people working mind take of it's going kind us kind we've of them. to you a about with especially think bit It's build million to on these X companies time nearly have of time, started. going for Accenture and You little for keep to when take how to what large

what going it's the for we of think, mean But us also and is to this terms -- I of are necessary, desire become. we become the to time. company sober very we to length in So

make of And to really kind of is to that's initiative. this. we going. talked to We've needed things fairly a large This 'XX a 'XX get about kind why jump start investment to the a

we're highly but we're So something not progress, excited It's to. short-term this a committed it, thing. about very seeing is great

Adam, our and with as our towards hear year, we're stay fiscal And on partners. through Just on just very add for the next next and pipelines look working as year. to out those more focused together plans plans work tuned, detail you'll obviously, detailing we that, to we really

I the were these gross you drivers where those it. it. or give last if And retention, changes any? at on to helpful. Got in retention. Any end And revenue then 'XX? are net from out know changes, super fiscal quarter that any we revenue the that's annually. Got of metrics so just those material of over tend No,

No. pretty have of I see for Those it for consistent much all. that while. been at a really don't numbers us

to So of is the customers. nature of -- that's retain these kind our business

the or really term. way way short other. one the Not So dramatic a we in don't changing see that

previously can think, kind we've nothing in quarter, or I another, Adam, of points quantified but from fluctuate less way they or XXX or prior any trends. basis that of change one disclosures that more terms

Super on just And for me, the then investment. one it. Got last helpful. marketing

there. some you to you've you investments Or difficult little the even noticed macro of those a sort in out environment to from bit You performance addition lean left think outsized there amplify what that Any before scenario could play see already in laid to that? consider to a brand you in has out? benefit do the

emphasis to of that think branding in to the lot onetime the on a we of make all going year, marketing on which kind time. our nature. We systems be why out, Yes. put integrator, And a investments we felt needed and is more we coming this in it is like little

One year we ago. a little before things And Kari never a of that the over brought had that, in a we CMO.

So spend that kind but continue continue replicate expect we we onetime and of year. into we it'll don't we marketing or morph as a percent think to revenue. spend a of as started. kind a what to have expect voice -- need of in now, capability this to next onetime we really and of normalized back wasn't part we investments, making X marketing I that's of don't and much to. sales But X But of are our share and investment, be

question next Craig-Hallum. Our Bennett from Chad with is

bit just into of kind of more the delay digging a commentary. So kind little deal

of to the kind vertical tech out I and last quarter, also think EU, pointed think quarter. you specific you last were I

geo from are standpoint? standpoint, Just from it in a you kind just EU a seeing the of more geographic than

just bit -- and third have It's that what we're when of on that situation move company, things the a approvals depends deals like are look at It selling And their situational. a some kind like going a things. really every software. is they -- they have what And take second, uncertain company does of we lot on it's just a are.

through deals we'd of ones slowed expect a other to through little and Some bit. down move get quickly move kind that

So any I think don't really particular pocket. it's

but relationships. lot obviously, think, historically, making is plans. tech -- bit one we that, a have little and of with the concentrated, their seen more a is right? long-standing And So been all I everybody we've clients adjustments tech we've

the follow-up just SI And right now. on a or progress are you're Okay. seeing then seeing

I at year, you XX% half that than think, and of roughly of SIs actually progressed you've your for or large to about -- if from you're deals faster second again, you've the balance have pipeline actually pipeline the talked received direct. accelerated year several mentioned the them least the that of for being the

considering going So just see actually is benefit growth? in world? actual And then to the subscription the would that's expect needle and when SIs organic move on everything on that that acceleration the bookings we should towards case billings, from

And again, become with Yes. we and Many these partners. the them. enhance have partners past, making time takes partners to are partners it we obviously been bigger the of with and in investments

board. get making, to way And we're and in and coming see would time. investment incrementally this involved again, with So the across engaged those started companies more over we jump that

providers or all a fact and set, leverage of of our world's product diversified doing any primary going revenue, up meant to companies incrementing way really which to mix into going very X the increasingly of that are really about business think a large at the but X to the is network then X, the our point see customers and things, inflection we're subscription ecosystem you're these our huge integrators, is And for and scale best have efforts not we network just also focus. a all

So that's how of kind what we got of do. here continue kind to we've and

our dramatically. balancing margin. incremental we up Again, us at you'll is been are them profitability. high going and other growth just things a see business of growth with disciplined So do our extremely actually This terms inflect very of expansion our We've none to in subscription this of as go. our profile all

We've highly grow past -- at not bait that a you taken things We're margin the revenue over on at kind at sustainable. free flow look now, are comes overinvesting kind cash long our have super of on and we in that all If term. to bait trying taken focused X quarters EBITDA. expanding we've think the subscription focused XXs been in don't highly on not of high costs. extremely gross We're highly on focused is

long-term we're stay business, going a focused and on So to building that. we're

margins in right of for and from that one low mid-XX% It last of takeaway? a way kind of correct just messaging sustainability like Is standpoint, to And Okay. is kind EBITDA me. sounds the that range to the durability just think. a

-- there this are we of takeaway, than kind on business' rate high faster I our a would kind EBITDA in the business. focused that's way out of the different that And took incrementing for cycle. at there a over appropriate XXXX, think business life it's -- that's been really We rate where the up other and have the XXX% margins on they're based time business most growth and driving since and faster rate. over has in profile subscription expanding growth think right them them

Our contracts of of business our very that one very, nature the our is and long-term fact the because

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primarily -- shareholders, kind mission-critical and is over and most our return to our as for says, that's of time important That biggest the the highest our, Star. going largest companies. Marje North just for world's generate

is with from Taylor UBS. Our next question McGinnis

acceleration. guide so now an growth currency. XX%, implies subscription deceleration XQ I currency believe to X% the constant revenue previously constant implied And guide a

talk methodology to maybe your then, down ticked were provide Marje, given embedded on. just any really So changes the relative that more in outlook? the uncertainty, in expectations? can you that in what on And color the be quarter And or just changed about the guidance conservatism assumptions maybe might additional

question. you Taylor, the for thank Absolutely.

much So guidance range put of wider. when outcomes days out XX the ago, we was

we As on we had some deal select the delays. last commented call, seen

the we've sort tech As Q&A well, discussed sector. and as in specifically in Europe of this session in

them through we right. saw move again the that more again of but then pushed slipped to definitely QX, -- close, we some those As deals of further

for QX. Michael really environment as to rates. right. growth think continues pushed But it's hard has it's specific expectation to the our we where focus And the quarterly is a going away, definitely the really demand so that have but the getting you lowered this we as And to be don't on articulated, choppy said,

sort in think we've And been conservatism, seen then setting I terms you've of how of

[Audio Gap]

the we we give really you the best to estimate want -- be to have and want information that we the at time.

is quarter. transparent. So always We be I there sort to the anything unnatural that say in try of wouldn't

build the will see management what that's accordingly. information transparent really reputation we're in we as the be you arises, to is that terms a to And team business. as with we of trying update I in incremental think

X the something fluid then I the digits. And like things has subscription if obviously low look last been are Great. very in And XQ the over similar. the environment. rev single looks implies you the it sequential quarters, But know growth guide in

a or So for in delayed that use of just And we with some deals keep terms growth year? starting could should is modeling we these it fair about as mind? in year, we of next think sequential point anything seasonality that next environment -- to as in that the

Yes.

deviate think talk lot in I further the But early fully been about we'll quarter-to-quarter. environment cetera. of a how growth think And next we've environment, reported give macro have is you revenue rates Obviously, choppy, a may to the -- think moving detail the more the we'll we've and so on quarterly macro lot the year, I the But from double parts. in too there quarter, year. it's et year-to-date, terms is digits. about of we subscription updates

demand that been disappear. we But has again, the don't we out super pushed expect expect to just to -- clear, be

about to stabilizes, these come And talked the back, expect deals revenue also back. and macro PS come our as we've growth. We

our become expect rate. We to additive that to growth

looking we So of the ahead good about us. feel outlook

my question how And thinking last that that Perfect. timing, you're from just then quantify pushed? And the say, let's about deals is, able perspective? you are were to

think again, the close we to -- macro dollar the We changes, I that amount. deviates as haven't the time typically quantified specific just see. the some And environment of from the normal rhythm

I make of side and the decisions So or And of just the of next right be matter this deals quarter, a to economic the closing our terms these be not try our quarter of think we some side we close that say but sort choppiness anything right? could changed of that beyond either, different macro in near-term there's wouldn't of that in to articulate quarter very business. we the on has beholden can

Instructions] with [Operator is next Andrew question Bank of America. The Obin from

This for what of And Forum Leaders of indication client feedback tone XXXX. here in is October. what David the there? from clients on early in of any was was And budgets the you Andrew Obin. the Curious held Ridley-Lane, kind calendar

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issue a year, I is think were that the that. and overall, deal we with to about people talking how react to that's recession really that now know and for don't a

other. So or that's really the uncertainty just a the I is continued really one think way hesitancy

you pipeline in cautious? are more growth the to Got adding the just And a you've sort still even mean that. I about past as customers quarters, of it. follow-up Are talked on bookings. here pipeline exceeding

this seen -- We've Absolutely. sorry.

change. Before, doesn't goes. pipeline demand The still

X here come problems. XX But to they complex not next Those They're yield to Our a solve the and on us notch the or for now. rate are very maybe again, come problems years. conversion. for down complex

done just that a tomorrow. usually of in So would get nothing matter whatever cycle. it's we expect to today And a doesn't done kind gets of change

Great. one last And one then for me.

professional another done of Just services Just kind headwinds on for on Logistyx months, Would -- better we talking be are that months? the X transition the Logistyx -- the X of the sort clients. side. understanding

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enormous. there us is take have like have to they from one just literally XXX today. I to larger the talking I like we acquisition, the we're like set talking had something like that over. transition And dying clients solution. on-premise was mentioned a the have they On opportunity about cloud were solution And he to to our comment, that servers of

it marketplace. side. solution to that's parcel to a knowing and with reason get nature of primary differentiated the global like think in stuff that when very had we really the really deal company is the we some So we we that other And to saw the

very via that bookings a great and shipping unique also with our platform. combines our and have international TMS really solution or global we trade So solution

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Suisse. with The Credit next Fred is Lee question from

quarter Just versus question. incrementally selling just was the more QX. one macro environment this deteriorated I if wondering

it's wouldn't I incrementally say better or worse.

or I and better You that it think or wouldn't it's right? to how I better think the ] just I be say with a incrementally worse, incrementally continues that about understood uncertainty companies question little took [ worse. I bit. is it of, deal uncertainty.

it in time all tech going starting starting Certainly and but at once. the I'm real to okay, every in companies see environment, to see really you day. And everything taper say, not certainly to you it, invest

rest of has say of same I is think more that's X the chop thing up. kind that for I now. would we've the only seen The quarters firmed it really

back it. especially starts as Are sheet. rational not And how competition they of might have behaving, another balance a has less question been that than strong any they historically? some then have Got the acting and just on venture --

the business. Well, when are do have generate a essentially profit, you irrational subsidize kind in things venture their of don't able to a to can you [indiscernible] of lot

new, the a and long the in. market we not time, case This though. that's that's So been participate has for

model see acting they way [indiscernible]. And don't sustainable we the have normally we just we So them a generate because obviously less more believe that's we or of any And business do. more than part the market.

[Technical Difficulty]

I'm up. you broke sorry, Fred,

Marje what Can there, RPO. apples-to-apples, for some question know million in acquisition one always you Marje. final one year-over-year? question on there's me? was $XXX for Just but that I hear final growth the Just

is obviously, number it's forma acquisitions. -- for the So pro

I million from my of top growth the this think know -- quarter, look rate. X% So at think don't number, when it year the was around but it I you $XXX the versus head, million around so ago $XXX I

for This end your you session. disconnect participation. your reached Thank conference, you the at We lines question-and-answer may time. concludes have and the phone of today's this