Good afternoon. My name is Sherry, and I will be your conference facilitator today. At this time, I would like to welcome everybody to Manhattan Associates' Fourth Quarter 2023 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer period.

[Operator Instructions] As a reminder, ladies and gentlemen, the call is being recorded today, January 30, 2024. I would now like to introduce your host, Mr. Michael Bauer, Head of Investor Relations of Manhattan Associates. Mr. Bauer, you may begin your conference..

Okay. Thank you, Sherry, and good afternoon, everyone. Welcome to Manhattan Associates' 2023 fourth quarter earnings call. I will review our cautionary language and then turn the call over to Eddie Capel, our CEO.

During this call, including the question-and-answer session, we may make forward-looking statements regarding the future events or the future financial performance of Manhattan Associates.

You are cautioned that these forward-looking statements involve risks and uncertainties, are not guarantees of future performance, and that actual results may differ materially from the projections contained in our forward-looking statements.

I refer you to the reports Manhattan Associates files with the SEC for important factors that could cause actual results to differ materially from those in our projections, particularly our annual report on Form 10-K for fiscal year 2022 and the risk factor discussion in that report as well as any risk factor updates we provide in our subsequent Form 10-Qs.

We note that turbulent global macro environment could impact our performance and cause actual results to differ materially from our projections. We are under no obligation to update these statements. In addition, our comments include certain non-GAAP financial measures to provide additional information to investors.

We have reconciled all non-GAAP measures to the related GAAP measures in accordance with SEC rules. You'll find reconciliation schedules in the Form 8-K we submitted to the SEC earlier today and on our website at manh.com. Now I'll turn the call over to Eddie..

card, catalog and customer. Iris empowers store associates to maximize sales conversion rates in the store, the ability to sell both what’s in the physical store and what’s in the broader supply chain in a single transaction, ensuring every possible sale is converted.

Furthermore, the highly visual customer profile within Iris empowers a store associate to truly deliver a personalized selling experience.

Staying with retail store just for a moment, our point-of-sale system performed incredibly well during this recent holiday selling period with about 30,000 retail associates using our solution and customer transaction volumes exceeding any other cloud-native point-of-sale solution in the market.

Now at NRF, we also highlighted our fulfillment experience insight dashboard. This capability is unique to Manhattan Active Omni and allows our omnichannel customers to compare their fulfillment performance against their peers and competitors.

A key omnichannel fulfillment experience metrics like click-to-deliver, order rejection rates, pick up in store penetration percentage and abandonment rates, among others, that display dynamically for each of our customers.

And we built this capability so that our Manhattan Active Omni customers can understand exactly how they stack up against the field. Fulfillment experience insights lays out these metrics for them in a clear and comprehensive manner.

And frankly, armed with this information, our professional services team members can provide corresponding process and technology recommendations to help move these metrics forward in the right direction over time. And we were – finally, we're also excited to announce our new partnership with Shopify.

Over the last several years, we've witnessed Shopify surfacing more and more often in our Manhattan Active Omni prospect and customer base. And we thought the time was right to team up with Shopify to offer the market end-to-end omnichannel commerce solutions.

Shopify shares our vision of providing solution which lower purchase friction, increase conversion and improve transparency and reliability during the fulfillment process.

And for our customers, both Manhattan and Shopify are focused on delivering functionality-rich solutions, which can be implemented on time and on budget and we start delivering value immediately for them.

We believe that in the near to medium term, the market will further emphasize total cost of ownership and lower project risk and the Manhattan Active Omni and Shopify partnership is well-suited to deliver on both of these.

Now speaking of partners, I’m proud to report that we finished 2023 by adding a record number of new partners to our Manhattan Value Partner or MVP program.

Whether it's SaaS providers like Shopify or Adient, transportation visibility providers like FourKites or project44 or Shippeo, or material handling and robotics vendors for use within the four walls of the DC, Manhattan Active platform applications are easy to connect and offer our partners access to a world-class customer base.

And we continue to – we'll continue to add and strengthen our relationships with premier third-party integration and advisory firms as well. Our network of technology and consulting partners help us connect with the broader market of target customers and improve the speed and success of our deployments.

So next quarter, I'll likely focus my product updates within our Manhattan Active supply chain execution suite. But for now, I'll simply mention that we continue to see strong demand and deal activity for our market-leading unified supply chain execution offering consisting basically of WMS and TMS.

This demand is coming from across the globe and across the industries. And finally, throughout 2024, we'll also continue to update you on the progress that our R&D team is making as we incorporate the latest generative AI technologies into our supply chain and omnichannel retail solutions.

So in summary, 2023 was a terrific year for Manhattan and we're very excited for the numerous opportunities that lie ahead to deliver simply world-class innovation into a growing customer base. So that concludes my business update. Dennis is going to provide you with an update of financial performance for 2023 and our outlook for 2024.

And then I'll close our prepared remarks with a brief summary before we before we move on to Q&A.

So Dennis?.

Thanks, Eddie. As Eddie highlighted, in 2023, we set all-time records in RPO, total revenue, operating profit, free cash flow and earnings per share. So a big shout out to 4,600 team members across the globe, great execution through the year.

For both the quarter and the year, we delivered a strong balanced financial performance on top line growth and operating margin. Both our Q4 and full year results exceeded expectations and compare favorably to the Rule of 50.

And if our revenue growth is normalized for our cloud transition, which excludes license and maintenance attrition, our performance is even stronger. Importantly, Manhattan continues to deliver strong, consistent results across revenue growth, profitability and cash flow. I'll start with recapping our financial performance for the quarter and year.

Regarding FX, it was a one-point tailwind to Q4 revenue growth and did not impact our full year revenue growth rate. For RPO, FX was a one-point tailwind to both year-over-year and sequential growth. Now to our results. All growth rates are on an as-reported year-over-year basis unless otherwise stated.

For Q4, total revenue, total revenue was up 238 or was $238 million, up 20%, and full year revenue totaled $929 million, up 21%. Excluding license and maintenance revenue, which removes the revenue compression by our Cloud transition, Q4 revenue growth was 24% and full year 28%, some nice double-digit returns here.

Q4 Cloud revenue totaled $71 million, up 38% with full year revenue totaling $255 million, up 44%. We closed out 2023 with RPO of $1.4 billion growing 36% year-over-year and 8% sequentially as we experienced strength from across our Manhattan Active Suite of products.

Excluding FX impacts, RPO exceeded the high end of our $1.4 billion outlook by $13 million, which was stronger than expected. Services had another fantastic year and great performance with Q4 revenue increasing 19% to $119 million with full year Services revenue up 24% to $488 million as Cloud sales continue to fuel Services growth globally.

Q4 adjusted operating profit was $77 million with an operating margin of 32.2% representing a 200 basis point year-over-year improvement. Full year adjusted operating profit totaled $281 million with a 30.3% operating margin and represents a 265 basis point improvement over 2022.

Both Q4 and 2023 results were driven by strong Cloud and Services revenue growth combined with operating leverage as our Cloud business scales. Q4 earnings per share increased 27% to $1.3 and GAAP earnings per share increased 30% to $0.78. Full year adjusted earnings per share increased 36% to $3.74 and GAAP earnings per share increased 39% to $2.82.

Q4 operating cash flow increased 60% to $88 million with a 36.3% free cash flow margin and a 32.9% adjusted EBITDA margin. Our full year operating cash flow was $246 million, while generating 26% free cash flow margin and 30.9% adjusted EBITDA margin. So turning to the balance sheet, our deferred revenue increased 13% year-over-year to $239 million.

We increased our cash position to $271 million with zero debt, up from $182 million at the end of Q3. In 2023, we invested $166 million in share repurchases and we are entering 2024 with a Board approved $75 million share repurchase authority.

Moving to the outlook, as consistently mentioned, our financial objective is to deliver sustainable double-digit top line growth and top quartile operating margins benchmarked against any enterprise SaaS comps. As noted on prior earnings calls, our goal is to update our RPO outlook on an annual basis.

Additionally, as previously discussed, our bookings performance is impacted by the number and relative value of large deals we close in any quarter, which can potentially cause lumpiness or non-linear bookings throughout the year.

With that, we are raising the mid-point of our preliminary 2024 RPO, revenue, operating margin and EPS targets that we provided last quarter. For RPO, we are now targeting $1.75 billion to $1.8 billion. The $1.78 billion mid-point compares favorably to our prior mid-point of $1.75 billion and represents 25% growth.

For full year 2024 guidance, we now expect total revenue of $1.015 billion to $1.025 billion with a $1.02 billion midpoint, comparing favorably to our prior midpoint of roughly $1 billion. Bunch of billions in there, represents 16% growth excluding license and maintenance attrition and all in, our target is 10%.

For Q1, we are targeting total revenue of $241 million to $245 million, which at the midpoint represents 16% growth excluding license and maintenance attrition and 10% growth all in.

For the rest of the year, at the midpoint, we are targeting total revenue of about $255 million in Q2, $264 million in Q3 and accounting for retail peak seasonality, $258 million in Q4. Driven by our revenue growth and the inherent leverage in our business model, we continue to track ahead of our original margin expectations.

As such, we are raising our 2024 adjusted operating margin guidance range to 28.75% to 29.25%, with the 29% midpoint comparing favorably to our prior midpoint that we provided last quarter of 28.25%. Additionally, included in our outlook is 175 basis points of headwind from our license and maintenance revenue attrition to cloud.

At the midpoint, adjusted operating margin on a quarterly basis is expected to be about 28% in Q1, 28.5% in Q2, 30% in Q3 and accounting for retail peak seasonality, 29.5% in Q4. The results in a full year adjusted EPS guidance range of $3.69 and $3.79 and a GAAP EPS range of $2.81 to $2.91.

For a comparison purposes, our 2024 adjusted tax rate is nearly 350 basis points higher than our 2023 adjusted tax rate. For Q1, we are targeting adjusted EPS of $0.85 to $0.87 and GAAP EPS of $0.71 to $0.73.

For Q2 through Q4, we expect GAAP EPS to be about $0.25 lower than adjusted EPS per quarter, which accounts for our investment in equity based compensation. Here are some additional details on our 2024 outlook. For full year 2024, we continue to expect cloud revenue of $326 million to $330 million.

At the midpoint, this represents 29% growth and assumes roughly $75 million in Q1, $79 million in Q2, $85 million in Q3 and $89 million in Q4. For services revenue, we are increasing our forecast to $532 million to $542 million, representing 10% growth at the midpoint.

On a quarterly basis, we expect Q1 services revenue of roughly $128 million, $137 million in Q2, $141 million in Q3 and accounting for retail peak seasonality, $131 million in Q4. On attrition to cloud, we expect maintenance and license to represent about a 6-point headwind to total revenue growth in 2024.

For maintenance, we expect a range of $121 million to $123 million or a 15% decline at the midpoint. On a quarterly basis, we expect Q1 to be $32.5 million, Q2 $31 million, Q3 $29.5 million, and Q4 $29 million.

We expect license revenue to be roughly $6 million or less than 1% of 2024 total revenue in hardware to be between $5 million to $7 million per quarter. For consolidated subscription, maintenance and services margin, we are targeting about 100 basis points of year-over-year improvement for 2024 and Q1.

We expect our effective tax rate to be 21.5% and our diluted share count to be 62.8 million shares, which assumes no buyback activity. Finally, in summary, 2023 was a great year, and we expect 2024 to be another year of balanced performance across revenue, growth, profitability and cash flow. Thank you. And back to Eddie for some closing remarks..

Thanks, Dennis. Well, indeed, 2023 was a very successful year for Manhattan. And while we remain appropriately cautious, given the volatile macro conditions that are out there, our business fundamentals and momentum are very solid, right.

Manhattan enters 2024 as the industry leader with world class technology, with record levels of R&D investment that’s contributing to our 75% plus win rates in the field, with industry leading levels of customer satisfaction, and a strong pipeline with numerous drivers for sustainable long-term growth.

So, in closing, I’d just like to echo Dennis’ comments and thank all of the Manhattan team members around the world for a fantastic 2023. Your dedication and commitment to our growing customer base is just unparalleled and clearly one of our key differentiators.

So, Sherry, that concludes our prepared remarks, and we’d be happy to take any questions at this point..

Okay. Thank you. [Operator Instructions] And our first question comes from Terry Tillman with Truist Securities. Please proceed..

Hey, good afternoon, Eddie, Dennis and Mike. And it’s great to hear all the talk about the billions. Maybe, Eddie a question for you and then I had a couple of follow-ups for Dennis. As we just get further along in kind of the monetizing the cloud innovation cycles that you have.

I’m curious, are you starting to see customers, whether it’s existing customers or prospects kind of look at all the things you have from a platform perspective, so supply chain unified commerce, and starting to think about, hey, we want to go – get more aggressive initially with more like a platform deal where it’s a couple of major kind of sets of products as opposed to maybe WMS or OMS or PS.

I’m just kind of curious about the buying behaviour. If they’re starting to feel like, hey, yes, we want to go bigger, faster, or does it still feel like, no, there’s the initial wedge, and then over time they add the other products. Kind of curious about the buying behaviour around just all the way you’ve delivered with the platform..

Yes, sure. It’s a great question, Terry and it’s really latter. Primarily if you think about it, because these are pretty big initiatives let’s just say, WMS and order management or something, any two of the major products, they’re pretty big initiatives in themselves. And usually our customers can only digest one of them at a time.

So they’re unlikely, let’s take that example, to buy WMS and OMS, knowing that they’ve got to pay OMS SaaS fees, whilst not beginning an implementation for six, nine, maybe even 12 months. So I think they have a vision to be able to build on the platform and acquire additional products down the road.

But just practically speaking, it doesn’t make a ton of sense, frankly, to pay SaaS fees for products that you can’t get to the implementation of..

Okay, I understood on that. And I guess maybe, Dennis, just to follow-up in terms of the cloud booking strength in the quarter. It was great to see in the upside.

I’m curious, if you could talk a little bit double clicking into that in terms of was there just some greater large deal exposure or benefits in the quarter or was there a larger number of just actual kind of units or customers signed up? Just kind of curious if there was anything that was interesting or different versus the prior couple quarters.

And then I had a follow-up..

I don’t know about interesting or different. I thought it was pretty consistent, kind of across the board, Terry..

Yep, I would agree with that Dennis. I mean, I’ll tell you, we had no record size deals in the quarter. We always liked those, but we had no record sized deals in the quarter. I would say from a geographic perspective, we had very good and very nice sort of balanced contribution from both the Americas, EMEA and APAC that that was enjoyable..

Yes. Yes, it sounds enjoyable. I guess just a follow-up question for Dennis or Eddie or Mike, it’s just related to – did move up the RPO balance a little bit. So that was nice to see, just given that we’re still in the beginning of the year.

One thing I’m curious about is, it does look like 1Q and 4Q were the biggest RPO or the bookings quarters in 2023. I’m not trying to pin you down the quarter where you kind of guided. But is there starting to be a common buying pattern with these cloud deals? Maybe it’s at the very beginning of the year or very end of the year with budget flush.

I’m just trying to get a sense on if you could kind of foretell how like there’s a pattern recognition now around booking? Thank you guys. Great job..

Thank you, Terry. No, not really. So, I would say definitely no budget flush at the end of the year, given that, obviously, their annual subscription fees. So there’s no license buys right at the end of the year or anything like that in terms of budget flush. Q1, I can see maybe – thank you for saying you’re not going to pin us down on this.

But I think in Q1, we sometimes see a little bit of a stronger buying pattern, because there’s still time to get systems in before peak, if you kind of buy early in Q1. So that is definitely an opportunity there for us, but no budget flush at the end of the Q4 [ph]. Thanks..

Thank you..

Thank you, Terry..

Our next question is from Brian Peterson with Raymond James. Please proceed..

Thanks gentlemen. Congrats on the strong quarter. So Eddie, I’d love to get an update. I know in the past, you’ve shared some details on the number of booked customers or implemented customers for Active WM.

Any updated perspective that you can share there?.

Yes. I think I can. We’re at somewhere – I don’t have the exact number, frankly, off the top of my head, but we’re 120-plus of contracted customers. Live customers, again, don’t quote me to the exact; we’re about 75 live customers and right at 200 – just over 200 facilities live around the globe.

So – and some of those, of course, are very large facilities, highly automated and so forth. So with, call it, 125, 75 and 200, I mean, this is a rock-solid proven solution now. We went through, of course, the peak season of 2022 with live Manhattan Active WM customers but as you can tell, we had hundreds of facilities that went through peak of 2023.

So, I think it’s sort of a take it to the bank bulletproof solution that’s proven at the top end of the market now..

No, it’s great to see that progress. And maybe just a follow-up on services hiring and anything on productivity. I just – obviously, we got the guide for the margins, but I’d love to understand how you guys are thinking about services capacity in 2024? Thanks guys..

Yes. We plan on increasing capacity, obviously, to help with customer satisfaction and so forth. As we’ve talked about before, hiring came in a little lower in 2023 than we had originally projected at the beginning of the year, only because we saw attrition very low, frankly. So, we modulated our hiring accordingly.

The onboarding and the productivity of the team members that we brought on has been outstanding, frankly.

Now that’s a combination to our kind of services operations team, all of the training programs, the center of excellence we have and so forth that is very focused on making those individuals productive as soon as we possibly can, but certainly expect several hundred hires this year as well..

Thank you..

Pleasure, Brian. Thank you..

Our next question is from Joe Vruwink with Baird. Please proceed..

Hi great. Thanks for taking my questions. I wanted to start with the Shopify alliance, which sounds pretty interesting. You mentioned there’s some existing customer overlap.

Can you maybe quantify that or where you see the most synergies in the customer base today? And then obviously, when you think about the global Shopify merchant count, that’s a massive number. I would imagine that’s not all addressable by kind of your enterprise-grade technology.

But what sort of expansion in audience do you think this could ultimately mean for Manhattan?.

Yes. So let’s see, great question. Look, this is driven probably a little more to be perfectly honest Joe with Shopify obviously has a fabulous history, a really great technology platform, and have been doing exceptionally well in.

I hope they won't be offended by this, but in the SMB space and have gradually been coming up the stack toward the enterprise where we play. So that's why we've started to see a lot more sort of cross fertilization of prospects and customers as they come up into kind of the real enterprise class versus us going down so much into SMB.

We've had that conversation many, many times about our focus on both Tier 1 and Tier 2. But we really do think the combination of our advanced technology and platform and Shopify's advanced technology and platform can really deliver some substantial and very effective and efficient results for our customer base and so forth.

And one of the beauties and I mentioned this in my prepared remarks. Both they and we are very focused on essentially speed to value. They’ve become – they are experts at this for the smaller merchants and so forth. And we think together we can bring that fast, efficient, effective enablement up into the enterprise..

Okay. That's great. And then maybe one for you and Dennis. Just the maintenance revenues they have been exceeding plan still growing here in 4Q. Obviously appreciate the 2024 outlook and maybe the pace of attrition picking up. I'm wondering if you just have any updated thoughts on kind of the migration timeline and those existing on-prem customers.

You mentioned at the beginning, what sort of duration might you expect for the majority to ultimately choose one of your cloud offerings?.

Yes. I mean, look, I've been saying it for a pretty long time. I think it's a six to seven year run. Now, it would be fair of you to say, but Eddie, you said six to seven years at the beginning of the year, and now you're saying six to seven years at the beginning of this year as well.

Yes, it's still in that range, Joe, would be my estimate to get through the bulk of the transitions. My guess is they'll still be 5%, 10% at the end of that period of time. There'll be sort of laggards and so forth, but it's a six or seven year journey in my view..

Okay, very good. I'll leave it there. Thank you..

I'm sorry. The one thing I'll mention, just a reminder there, Joe. We essentially offer no incentives for either our customers or for our sales guys in a sales team to promote it. Our strategy is when the time is right, we're there for you. So there's no incentive and frankly, there's no….

Gun to the head..

Gun to the head. Thank you. I was going to try and look for a better, nicer expression than that, but there's no threats of lack of support or anything else..

Yes. Okay, I understood. Thank you..

Thank you, Joe..

Our next question is from Mark Schappel with Loop Capital Markets. Please proceed..

Thank you for taking my question and nice job on the quarter, guys. Eddie, with respect to your point-of-sale business, I was wondering if you could just highlight or point out some of the biggest opportunities you face and also some of the challenges you're facing right now.

So, for instance, are you facing challenge wise, are you facing more so in the marketing side or maybe in the product side?.

Yes. Great question, Mark. So let's start with the challenges, get those out of the way. I just think we've still got a little bit of an awareness challenge at this. We are beating the drums and telling neighbors, friends, and aunts and uncles as best as we possibly can about this world class solution that we have. Number one.

Now at the National Retail Federation Show Conference, I should say a couple of weeks ago, and I mentioned in my prepared comments, we launched the next generation. So we still have got the most revolutionary cloud native point-of-sale in the industry. But we updated it yet again, next generation and launched it at NRF and very well received.

So I think awareness is still kind of a challenge. Now you and others have heard me talk about the goal by the end of the year was to have about 10 live customers. Well, we've got that. We've got about 10 because I think that sort of gets you over the hump in terms of, okay this is not a little early cycle product anymore.

And the fact of the matter is we went through the holiday peak season here with 10 live customers, 30,000 store associates using our system.

Every penny of revenue, if you think about the customers that run both Manhattan Active omni and point-of-sale, right, all of the wholesale business if they have it, their direct-to-consumer business is all running through Manhattan Active omni, all of their foot traffic revenue is running through point-of-sale.

So every single penny of their revenue is running through the Manhattan solutions. 30,000 associates and right around 1,500 more now, but right around 1,500 stores live on point-of-sale through the peak season.

And transaction volumes that are substantial, let's just call it that and certainly exceed any other cloud-native point-of-sale system out there. So feel really good about kind of where we are with the product.

We've noted, so a long answer here, but we noted some of the wins we've had against best-of-breed point-of-sale companies, head-to-head with no other solutions for Manhattan and no previous experience with Manhattan. So clearly, we can go head-to-head.

And now, I mean, if there was ever any question about scalability and so forth, we sailed through Q4 with, again 30,000, 1,500 stores, very high transaction volume. So feel like we're there. We just got to beat the drum, get the word out..

That's helpful. Thanks. And then shifting gears a little bit here.

With respect to your sales motion, could you just give us a sense of what percentage of bookings were cross-sell upsell during the quarter or actually during the year?.

I think, let's see, we're right around – give me a percentage here and there, but we were just under 30% for the quarter, and I think for the year we are right in the 26%, 27%..

Perfect. Thank you. That's all for me..

Okay. Thank you, Mark..

Our next question is from Matt Pfau with William Blair. Please proceed..

Hey. Great. Thanks and nice quarter guys. I wanted to ask on the Shopify partnership.

Is that just a product integration partnership? Or is there a go-to-market motion there as well with them?.

Yes, both. I mean, as is, obviously, we've announced the partnership as is customary with us, and I think Shopify too. We're going to make sure that we've got all of the technical aspects of product integration, end-to-end integration and process flows completely ironed out before we do anything more.

But now it's – at the moment, it is, we're working on the certified integration. We've got joint clients that are in active implementation, we expect to be live in Q2..

Got it. Great. And then I wanted to ask on the margins. I understand that – I think the margin – slight margin decline, operating margin decline you're guiding for in 2024 is effectively all driven by revenue mix, with the runoff of maintenance and license.

As we think like longer term, about the cloud gross margin, which you don't break out specifically, but is that still ramping? Is there still upside to that as you scale? How do we think about that?.

Yes. Yes, there is. I mean, we're effectively continuing to increase operating margins if you take out the drag, and we still think there's scale opportunity in client operations and up and down the P&L, frankly..

Okay. Great. Thanks guys..

Thank you, Matt..

And our final question comes from Blair Abernethy with Rosenblatt Securities. Please proceed..

Thanks very much and nice quarter, guys. Dennis, just wondering on the professional services side of the business. If you look at your overall hiring, your total employee headcount was up around 10% in the year. But your professional services revenues were up around 24%.

Can you just help reconcile sort of capacity in that professional services business and pricing in the market, how that performed in 2023 and sort of what you're looking at for 2024?.

Well, Eddie here. Just a couple of points. I mean, obviously, we have seen a little bit, not a ton, but we have passed on a little bit of wage inflation and so forth for that customer. So you've seen hourly rates tick up a little bit.

But most of the leverage comes from the efficiency of the organization, for sure, particularly as we continue to focus on the center of excellence that I talked about, the training and the onboarding of the new resources.

Now the other thing that I mentioned, we had forecasted a little bit higher headcount acquisition in 2023 than we needed because attrition was lower than we expected, that helps efficiency for sure..

Okay. Great.

And is there – with the Shopify relationship, will that also drive some professional services, I guess, it would if larger customers adopt your solution?.

Yes. Sure. Sure. Yes. No doubt it will. Now part of our objective there, just to be clear, is to take out any of base integration work that's needed to be done. Between us, we'll carry that cost. So the idea is to speed up implementations, reduce the total cost of ownership and so forth.

But nonetheless, there's still professional services fees associated with implementing that joint solution..

Okay. Great. Great. And then my next question was just really around – just maybe a little more color on the guidance, the revenue guidance for fiscal 2024.

So 10% on the top line, did 21% in 2023, did 15% in 2022 and is there – I just want to get your sense of sort of how you came to your 2024 revenue view?.

Well, we're – our revenue growth guidance coming into 2024 is roughly the same as it was coming into 2023, slightly higher actually..

Okay.

Is the environment feeling about the same as 2023 at the end of last year?.

Yes, in the same ballpark. Obviously, there's a few things going on around the world that are happening now that weren't happening at the beginning of 2023. 2024 is an election year, et cetera, et cetera. So the things that you know about. But aside from those things, everything feels about the same..

Okay, great. Thanks very much..

Our pleasure, Blair. Thank you..

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

Okay. Terrific, Sherry. Well, thanks, everybody, for attending today. Again, we're pleased with 2023. Looking forward to a fabulous 2024, and we look forward to updating you on the Q1 results in about 90 days. Thank you..

Thank you. This will conclude today's conference. You may disconnect your lines at this time and thank you for your participation..