PRO - NYSE

Greetings. Welcome to the PROS Holdings Third Quarter 2022 Earnings Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this call is being recorded. I would now like to turn the conference over to Belinda Overdeput, Director of Investor Relations. Thank you. You may begin.

Thank you, operator. Good afternoon, everyone, and thank you for joining us. Our earnings press release, SEC filings, and a replay of today’s call can be found on the Investor Relations section of our website at pros.com. Our prepared remarks will also be available on our website immediately following the call and will be replaced by the official transcript, which includes participant questions, once available. With me on today’s call is Andres Reiner, President and Chief Executive Officer; and Stefan Schulz, Chief Financial Officer. Please note that some of the commentary today will include forward-looking statements including, without limitation, those about our strategy, future business prospects and market opportunities, and our financial projections and guidance. Actual results could differ materially from such statements and our forecast. For more information, please refer to the risk factors described in our SEC filings. PROS assumes no obligation to update any forward-looking statements to reflect future events or circumstances. As a reminder, during the call we will discuss non-GAAP metrics. Reconciliations between each non-GAAP measure and the most directly comparable GAAP measure, to the extent to which available without unreasonable effort, are available in our earnings press release. With that, I’ll turn the call over to you, Andres.

Thank you, Belinda. Good afternoon everyone, and thank you for joining us on today’s call. We delivered another strong quarter. We grew our subscription revenue by 17%, total revenue by 12% and delivered strong profitability improvements. Despite a challenging macro environment our team continues to execute well in drive market adoption of the PROS Platform, at least doubling our deal count every quarter of this year. Companies are turning to PROS to help them drive profitable growth in the face of increased market volatility in the shift to digital selling. Buyers today whether B2B or B2C expect to be able to engage with sellers through digital channels while still blending in various human touchpoints. Businesses need to deliver the right offer at a market relevant price in real time across any channel the customer chooses to engage in. I believe the PROS Platform is the only solution in the market with the breadth of capabilities businesses need to win in the digital era. It’s been just over a year since we officially launched the PROS Platform. Our highly differentiated platform has contributed to our success this year and we believe our platform strategy will continue to fuel our growth long-term through three key areas. Successful lands, many expansion paths in extensible capabilities. First, successful lands or platform of modularized capabilities enable us to easily land new customers and deliver rapid time to value. I believe no one else in our market comes closely delivering the significant value we deliver. Just look at the value assessment of over 130 customers we publish on our website that shows on average customers generate 8% revenue uplift, 200 basis points to 500 basis points of margin improvement in 67% efficiency gain. In Q3, ABB, a leading manufacturer of electrical equipment and GE Healthcare a subsidiary of General Electric selected our platform to drive profitable growth with our price optimization and management capabilities. ABB and GE are just two examples from Q3 of how PROS can land at multinational conglomerate with a modularized offering to drive immediate value. Another example is VM Distribution, a French distributor of construction materials, who selected our platform to power price management in sales automation for their suppliers and end customers. VM was looking for an end-to-end solution that could scale with their business and integrate seamlessly with Microsoft Dynamics 365, landing with PROS pricing and CPQ capabilities, VM can drive higher win rates, margin improvements in efficiency gains. To accelerate our land strategy, we’re continuing to innovate to drive even faster time to value in an amazing customer experience. We recently released new price optimization and management activation packages for B2B customers designed to deliver high value prescriptive workflows to power profitable growth in under 30 days. Similarly, in travel, we launch new activation packages for RM Essentials Solution designed to land new airline customers and get them live with the most advanced AI in the industry in eight weeks to 10 weeks. Any airline, regardless of size or complexity can adopt their solution to drive profitable growth. Second, we fuel our growth with our platform by having many expansion paths. Customers can easily extend to adopt new modules or capabilities. They can add new divisions or geographies into their solution and they can expand usage so our solution grows as their business grows. Two expansion examples among many we saw in Q3 were Cathay Pacific Airways and Oman Air. Cathay Pacific Airways, the flag carrier of Hong Kong expanded their partnership with PROS by choosing to migrate to our SaaS platform. Cathay Pacific will fuel their revenue recovery with PROS latest innovations in revenue management. Oman Air, the national carrier of Oman, expanded from our RM Essentials Solution to RM Advantage, enabling their journey to our market leading continuous dynamic pricing capabilities. Third, our platform provides customers and partners with the ability to extend our capabilities to bring new innovations to market. In Q3, we extended our digital offer marketing solutions with the launch of the EveryMundo Marketplace, an application store that connects third-party developers building eCommerce applications on EveryMundo platform to enterprise customers. The EveryMundo Marketplace is the foundation for an ecosystem of partners like Front10 to generate even more value for customers and for business. Where customers can access over a 100 products on the marketplace built to help them drive more wins. We also launch our new developer portal, buildwith.pros.com to support rich omnichannel commerce experiences, buildwith.pros.com provides our customers and partners a library of PROS APIs empowering them to integrate with and embed PROS data insights in services within their enterprise applications accelerating time to market while providing a richer customer experience. Leroy Merlin, a French home improvement retailer is one example of a customer extending PROS Platform services into their ecosystem, using embedded PROS APIs for pricing in quote configuration, Leroy Merlin provides their online customers with a seamless custom order configuration process on their website. We have significantly extended our leadership position over the last several years. Our SaaS-native AI solutions process over two trillion transactions per year. That’s more than 12 times the volume of transactions that Visa does annually. Our blue-chip roster of Fortune 1000 customers come from a wide range of diverse industries, including airlines, technology, food, and energy among many others, and they all rely on the PROS Platform to drive profitable growth. The volume and diversity of the data available to our algorithms is what gives our customers AI-based outcomes that no other competitor can match. Just as we’re driving profitable growth for our customers, we’re focused on driving our own profitable growth. We’re being intentional about where we invest. We recently made structural adjustments to accelerate key growth initiatives and improved profitability. Stefan will cover more on the impact of this reprioritization in his remarks. Before I close, I’d like to thank our incredible global team for their passion and dedication to PROS. I’m so proud of everything we’ve accomplished so far this year and look forward to delivering another strong quarter to wrap up 2022. I’d like to thank our shareholders, partners, and customers for their ongoing support of PROS. With that, I’d like to turn the call over to Stefan to cover financial performance and outlook.

Thank you, Andres, and good afternoon everyone. We delivered a strong third quarter and as Andres mentioned, we’ve more than doubled our deal count year-to-date, and we were able to do this while improving our ratio of non-GAAP sales and marketing expense to revenue. We welcomed a number of new customers to the PROS family in Q3 and one I would like to highlight is Rapido, a leading French manufacturer of RVs, vans and mobile homes. I am a big fan of RV and I’m thrilled to welcome Rapido to the PROS family. Rapido was seeking a CPQ solution that could support sales to their vast network of retailers online to drive efficiency and profitable revenue growth. As Andres highlighted in his remarks, our end-to-end platform capabilities supporting omnichannel selling is a key differentiator for us in the market and one of the reasons we ultimately won Rapido’s business. Now highlighting our third quarter results. Subscription revenue in the third quarter was $51.8 million up 17% year-over-year, and total revenue was $70.3 million up 12% year-over-year. Our third quarter recurring revenue was 84% of total revenue. Our non-GAAP subscription gross margins rose to 77% for the quarter, which is up from 72% a year ago and 76% last quarter. Also, our services gross margin reversed a trend of losses to a positive 4% margin in the third quarter. And as we get into 2023 and beyond, we expect services margins to be slightly positive on an annual basis with some quarterly fluctuations due to seasonality trends. Our trailing 12-month gross revenue retention rate in the third quarter remained above 93%. Our adjusted EBITDA loss in the third quarter was $2.2 million, significantly exceeding our guidance and contributing to our ability to raise our annual guidance. This outperformance was driven by a combination of our revenue outperformance, improved gross margins and some one-time benefits from third-party expenses, which materialized into savings in the third quarter. I’m proud of how our team continues to drive momentum for our business while driving greater efficiencies into our operations. Free cash flow burn in the third quarter was $9.1 million. We exited the third quarter with cash of $206.8 million and as is typical, we expect to see a significantly improved fourth quarter free cash flow. Our non-GAAP loss per share was $0.06 per share. Our third quarter calculated billings increased 20% year-over-year and 19% for the trailing 12-months exceeding our expectations and demonstrating the strength we saw in the quarter. And we ended the quarter with 62 quota-carrying personnel and we expect to be approaching 70 quota-carrying personnel by the end of the year. As I said earlier, we continue to drive greater efficiencies in our sales rep productivity and are confident in our teams of capacity to deliver on our objectives for 2023. Now, turning to guidance. For the full year, we are raising our revenue and adjusted EBITDA guidance. We expect 2022 subscription revenue to be in the range of $203 million to $203.5 million, a 14% growth rate at the midpoint and total revenue to be in the range of $273.75 million to $274.75 million, a 9% growth rate at the midpoint. We expect 2022 adjusted EBITDA loss to be in the range of $21.5 million to $22.5 million. We are maintaining our annual guidance for 2022 free cash flow and expect a burn of between $21 million and $25 million. And we expect total ARR at constant currency to be in the range of $246 million to $250 million in subscription ARR at constant currency to be in the range of $224 million to $228 million. As a reminder, we have historically provided ARR guidance at constant currency. Also, while mentioning currency, I would like to make a couple of points related to the recent changes in foreign currency rates and the impact of PROS. First, as we mentioned last quarter and in past earnings announcements, even though the majority of our revenue is generated outside the United States, our foreign denominated ARR is less than 15% of our total ARR, so the foreign exchange impact on ARR and revenue is often less than what the geographic revenue mix might imply. Second, the significant swing between the euro and U.S. dollar largely occurred over the past seven months and not the full year. Accordingly, any revenue from first quarter billings weren’t significantly impacted by the stronger U.S. dollar. For these two reasons, we expect the impact to our recurring revenue and total revenue for the full year to be under 1% from foreign currency fluctuations. While the foreign currency impact is not significant for the full year, the impact is growing each quarter and we currently anticipate slightly more than a 1% impact in the fourth quarter. Our ARR, on the other hand, is reported at a point in time, which means the full foreign currency exchange impact from last year will impact ARR at the end of this year. As of now, we are expecting about a 2% decline from ARR at constant currency rates to ARR at current exchange rates. Assuming the current exchange rates hold through the first half of next year, we anticipate a similar 2% impact to our full year recurring revenue in 2023. Now, shifting back to guidance, our fourth quarter guidance is as follows. We anticipate subscription revenue to be in the range of $52.1 million to $52.6 million, representing a 11% year-over-year growth at the midpoint. We expect fourth quarter total revenue to be in the range of $68.5 million to $69.5 million or 6% growth at the midpoint. This range does imply a sequential decline, which is caused by two things. Lower services revenue due to the lower number of billable days because of the holidays and the growing negative impact from a stronger U.S. dollar. We expect fourth quarter adjusted EBITDA loss to be between $4.2 million and $5.2 million. At the midpoint this is a 26% improvement over last year, but like last year, a sequential decline from the third quarter. The fourth quarter seasonal decline in services revenue and the one-time expense benefits we saw in the third quarter are causing the sequential decline in adjusted EBITDA. Overall, we are making solid progress on improving profitability while still investing in the growth opportunity in front of us. Using an estimated non-GAAP tax rate of 22%, we anticipate a fourth quarter non-GAAP loss per share of between $0.11 and $0.14 per share based on an estimated $45.5 million shares outstanding. As Andres mentioned, we have reprioritized our investments to focus on supporting key growth areas for our business. As a result of this reprioritization, we expect to incur severance charges in the fourth quarter of approximately $4 million to $5 million, which we will exclude from our non-GAAP results. Before we turn the call back over to the operator for questions, I wanted to highlight some of the key components in our long-term model. We expect the strong bookings trend we are seeing today continue into the future, and believe that will ultimately lead to our targeted total revenue growth of about 20%. We’re also targeting total gross margins, approaching 70% and EBITDA and free cash flow margins of 10% or better. We made updates to our investor presentation on pros.com to include these long-term projections and we will provide more details on our long-term target model at our next outperform event in May. Additionally, we have streamlined our investor materials to embed the rolling eight quarter view of key business metrics directly into the investor presentation rather than providing a separate table in another location. In closing, I would like to thank our employees and customers for their continued passion and support. We also thank you for your continued support of PROS and we look forward to speaking with you at our upcoming events. I will now turn the call back over to the operator for questions. Operator?

Thank you. [Operator Instructions] Our first question is from Chad Bennett with Craig-Hallum Capital Group. Please proceed.

Great. Thanks for taking my questions. Nice job again on improving and executing in the quarter and seeing the acceleration in the business metrics.

Thank you, Chad.

So, I mean, you guys are a bit of anomaly at least from what I’ve heard this quarter in terms of your business seems to be strengthening. You cited a number of EMEA wins, and which you’re not hearing a lot about cited to number of Asia-Pac wins, and particularly in travel. Andres, can you – I mean you didn’t cite any kind of EMEA or just overall macro concerns around sales elongation or close rates or deal scrutiny. Is it fair to say you guys feel pretty good about what’s going on?

Yes, Chad, great question. Yes, overall, look, I think our team is executing phenomenally well. I think that definitely I would tell you, look, there is deal scrutiny. But I talked about last quarter the importance of us being very intentional about time to value in ROI, in solving a clear pain point that customers have, that they need to solve. And I think our team has been good at really being able to show the massive value that we can drive in a very short amount of time in land deals, really in all parts of the world. EMEA did well, I would say North America was very strong. I was pleased to see in travel us doing deals in the Asia region. So overall very pleased with the results and with execution.

Got it. And then maybe one for Stefan, I mean the, the subscription growth accelerated pretty nicely, I think the best in a couple years on a year-over-year basis. And then you highlighted recurring billings and overall billings, I think right around 20% or at 20%. If I look at, you never want to take one quarter as you talk about, but if I look at the trailing, call it four from a billing standpoint, you’re kind of right around upper teens to maybe 20% [ph] if I’m aggressive or, being a little more aggressive on a trailing basis. And again, it seems like the travel business you’re feeling better about and B2B I think has been strengthening, for a number of quarters here, how should we think about that recurring billings kind of trailing 12 and looking ahead into the subscription growth rate?

Yes. So Chad, thank you for the comments. Yes, we’ve been very happy with, as Andres commented on the performance of our sales team and our go-to-markets team that have done quite well. And to your point, we did have a trailing 12-month number of about 19%, which is more than what we were thinking. We were thinking probably more in the mid-teens. And I would say if you think about, going forward there is some uncertainty in the macro, that we’re working with right now. There’s obviously with the change in elections, you’ve got the European War that’s, going to go into the winter and there’s a lot of uncertainty around energy and some of the things that go with that. I would probably tamp down that, that expectation down to probably the, mid-teens this range. Mainly because of some things that we’re seeing in the macro that we just need to get some answers addressed before we’re willing to say we can, sustain that, that level of performance going forward. It’s really mainly that.

Okay. And then maybe one last one real quick, if I could. Stefan, I think you talked about some restructuring or both of you guys did on in the business and Stefan, you talked about a $4 million to $5 million charge in fourth quarter. Just any more color into that and what to expect in the go forward in the next year in terms of cost savings relevant to that charge? Thanks. I’ll hop off.

Yep. Nope, good question. So, we mentioned, it’s really a reprioritization. So, we really weren’t looking to necessarily just go in and do just a raw cost savings. You’ll see our expenses continue to grow. But we really wanted to do is make sure we’re investing in those areas that are going to drive the growth force going forward. Being very cognizant of the fact that we want to one number one grow, but number two, we want to do so responsibly and in a way in which we can also drive improvement to our bottom line and in our free cash flow. We’ve talked before about wanting to be at a place where we could, approach free cash flow break even, and that is still our intent, as we look into 2023. So it was really a reprioritization effort that, that we executed upon at the beginning of this quarter. And given that it happened in Q4, we’re not going to really see the effect of it until Q4 and then, and obviously you’ll see the charge when we release next quarter.

Thanks so much.

Thank you.

Our next question is from Parker Lane with Stifel, Please proceed.

Hi, it’s Max on for Parker. Thanks for taking my questions. Stefan, just staying right there on kind of the quota-carrying personnel, there’s that dip as you guys reprioritize and then you expect to get back to the 70. Do you expect kind of the implied eight more personnel to be ready to go to contribute right when FY 2023 starts and what should we think about kind of sales and marketing expense as a percentage of total revenue going forward after the nice kind of reduction that you guys are able to deliver this quarter?

Yes. So, I would say that to be first answer to your first question around the quota-carrying personnel. No, they will not be ready to go January 1. It takes a little bit more time of a ramp, but we would like to make sure that we hire these new reps in time to where they can have a meaningful amount of productivity in 2023. So looking for those the last, let’s say half to three quarters of a year, we’d like to make sure that they’re as productive as possible to add to our number for 2023, but not on day one. Your second question about, where we are in terms of our selling and marketing. I think as you, as we look at the model, we’re still looking at the upper 20s to be in our selling and marketing expense. One of the reasons you saw a bigger reduction in Q3 than normal is, we are going through a bit of a reprioritization of the areas that we want to focus on and invest in from a marketing standpoint. We just recently hired a new CMO who is really looking at ways in which he can make the, drive more visibility and more demand for our solution in our products. And we are going through a little bit of change there. So, I would expect to see our marketing expense come back a bit in the fourth quarter and next year.

Got it, Thanks. And then Andres one for you, just thinking about the kind of very, very strong deal count so far year-to-date, doubling last year, is this expected to continue for the remainder of the year in the next year? Is it somewhat of a pull forward maybe from next year as people realize how powerful your solution is? Just a little more color on that would be great.

Yes, Max great question. I would tell you, look this was, we executed on our platform strategy a year ago with intent that we were going to drive significantly more deal growth. And I think we’re seeing that really come through. I think we’ve made it easier and easier to adopt our platform to get to value and to have very measurable ROI. And I do expect continuing in the fourth quarter to see strength in deal growth, it’s too premature to talk about 2023, but I do expect us to continue to see good deal growth. And if anything, I would say on the ASPs, we’ve seen them slightly come down, I have talked previously that we’d like to get the ASPs in the 200 range, and now we’re just under 300. So not in material move, but in the right place. And as I talked in my prepare remarks, we really wanted to be able to land any business of any size get to value and have many paths to expand. And we’re seeing great success very proud to have, GE Healthcare, ABB landing on the platform and also seeing companies like Auto

Got it. That’s it from me. Congrats on the next quarter.

Thank you, Max.

Our next question is from Patrick Schulz with Robert W. Baird. Please proceed.

Yes. Hey guys, thanks and congrats on a great course. It seems like a lot of good progress you guys are seeing. So, I just wanted ask just on the, the travel and airline environment, it seems like that continues on the recovery path and as this progresses, how should we be thinking about how much of the airline’s revenue mix is driving that 20% long-term revenue growth target? And then also I’m curious to hear your thoughts on where revenue management and PRO software ranks in terms of the airline’s top investment priorities as travel continues to recover?

That’s a great question, Patrick. Couple of things. Look for now, year-to-date, B2B is driving the majority of the growth. So travel’s still in the early recovery, but we think travel is very strategic long-term. We said, we’d like to get travel to the low to mid-teens growth. We’re definitely nowhere close to that right now. And part of that is while there’s been a pretty significant recovery, there’s still many markets like AsiaPac that are still way below the 2019 levels. The good thing is that we are landing, we’re driving value, and I think our solutions even expanding beyond revenue management is the full digital offer marketing to shopping, merchandising, and offer optimization. All the areas, where we’ve invested in travel from the passenger to groups to air cargo are very strategic areas that airlines are focused on, as well as really driving the next generation digital experience for all of those, whether it be passenger, whether it be groups, or whether it be air cargo. So, we feel we’re in a great position to capitalize on the revenue recovery in the travel industry. I would still say we’re in the early innings of that recovery, but we are very confident that the innovations that we’ve done are really resonating in the market.

Great, Thank you so much. And then one more quick question to you. You guys recently noted that you entered into a reseller agreement with Accenture, so I was just wondering if you could provide any update to the momentum you were seeing on the partner side. Are you starting to see customers lean into the partner channel even more during the current macro environment? And then how do you expect the partner channel to evolve over time? And how did this channel play into your long-term growth and international expansion efforts?

Great question, Patrick. Look our channel is a big part of our growth strategy, whether it be Accenture, whether it be Microsoft or broad partner ecosystem EY and many others that we’re working very closely. And I would say today they’re contributing about 30% of the business we’re driving. But we see that continuing to increase significantly. And it is a big part of our growth strategy also, as you talked about the Accenture reseller agreement, reseller motion, it’s a new motion for us long-term. We want that to be a significant part – for growth. But I would say we’re in the very early innings of that, but we’re seeing promising results.

Awesome. Thank you guys so much.

Thank you.

Our next question is from Scott Berg with Needham and Company. Please proceed.

Hi everyone. Thanks for taking my questions here. Congrats on what appears to be a good quarter. A couple items, Andres, let’s talk about sales execution a little bit. I know you talked about number of deals closed is up double or more than double year-over-year. It’s the third straight quarter. I know the companies went through some changes and it’s go-to-market strategy. I know you had a change in leadership there. Stefan certainly talks about some of the reprioritizations, but as you look at the productivity levels, maybe in the quarter or a year-to-date, how far are we in terms of reaching your goal on sales productivity? Because my guess is we’re probably not there, but how close are you?

Yes, I would say we’re probably never going to be close to reaching my goal not getting a size. I think is the right productivity has significantly increased year-over-year. I mean, if you look at it even from a QCP perspective, we ended the quarter at 62 a year ago, where at 64, you can see that the more than double deal growth, which with if a couple less quota-carrying personnel. I would tell you that the level of execution across organization both EMEA, North America or travel is significantly improving. And we’re seeing much higher. There is always room for improvement and I believe we can still drive better rep productivity and we’re very, very focused and being very intentional on how we’re driving improvements to rep productivity.

Got it. Helpful. And then on one of your kind of three key areas that you outline, Andres, we’ll focus on the extensible item because I think we all really understand what lands and expansions, generally mean over time. But as you look at what you announced today are talked about with the EveryMundo Marketplace, what do economics on that opportunity look like for the company? Is this something that can be meaningful over time or is this a kind of a nice add-on that really just kind of helps your involvement in that ecosystem that’s really maybe less tangible on the economic side? Help us kind of balance what that looks like?

Yes, great question, Scott. I think it has its significant potential for several reasons. One with this marketplace, if you think about your digital experience in eCommerce, it’s a front end of every business. And you have a lot of companies that want it tailor-made that experience in creative, very customized and marketing oriented user experience. This ecosystem and marketplace will allow third-party partners to build on top of our platform. The more they build on top of our platform it allows more of our solution and obviously us to be part of more of those revenue opportunities for our customers and bring the intelligence and all of the full capabilities, not just around digital offer marketing, but the full offering order management capabilities. So, we see this as very strategic, commercially for us as well as for customers, giving them a better user experience on the solution. So, I think this is a big opportunity also, as we add both our partners and PROS, more applications, those applications any customer can activate. So it’s also part of or expand strategy as well.

Got it. Very helpful. Congrats on the good quarter again.

Thank you.

[Operator Instructions] Our next question is from Nehal Chokshi with Northland Capital Markets. Please proceed.

Yes, thank you. Congratulations on that strong subscription revenue accelerating from 14% in June quarter, 17% in September quarter, especially given this current macro environment. And you may have already answered this question, but you are guiding subscription revenue decelerate to 11% year-over-year growth. Why is that?

Yes, Nehal, I’ll take that. So if you may recall last year we had – we had a onetime term license renewal that was in our Q4 results. And if you go back and look at the numbers, you can see that popped, that actually occurred. So that’s not a recurring type of a renewal. And so we benefited greatly from that, that renewal last year, and we’re not getting that this year. And then I did comment, we are starting to see a little bit from currency, so currency is starting to creep into our numbers on a year-over-year basis. And when you look at, I mentioned about a one percentage point impact it’s a little slightly more than that on the subscription side, but those are the two reasons. I think you take those two things away and we’re very comparable to where we were in Q3.

Got it. And what was the magnitude of that one time term license benefit in the 4Q?

It was a little over $1 million.

Great. Okay. Great. And then on just customer value assessment, I believe this is a second generation of that study, correct?

Yes.

Yes. We’ve launched, we’ve published it publicly in our website, yes.

Okay. And I recall that the first generation, I think the settings of like a, I don’t know it’s like a 4% to 6% revenue uplift and now you’re talking about 8% revenue uplift.

Yes. The first generation we talked about more than 6%. The actual average is 8% revenue.

I see. Got it.

So, so this is the actual average…

No changes that you have?

No change is the, the actual average. And before we’re a little bit more conservative. We said it was greater than 6%, which 8% happens to be, this is the actual average of the full value case study. So it’s really an 8% on average, 8% revenue improvement to 100s and 500s margin basis point improvement in the 67% improvements, efficiencies.

Awesome. Great. Those are fantastic numbers.

Yes.

We have reached the end of our question-and-answer session. I would like to turn the conference back over to management for closing comments.

Thank you for listening to today’s call. We look forward to speaking with you at conferences and events this quarter. We will be attending the Stifel Midwest One-on-One Growth Conference on November 10, The Needham Virtual Tech Conference on November 17, and also the Craig-Hallum Alpha Select Conference on November 17. If you have any questions following today’s call, please contact us at [email protected]. Thank you and goodbye.