Jim Mathias - VP of IR Jim Reynolds - CFO Ron Cogburn - CEO.

Arun Seshadri - Credit Suisse Brian Essex - Morgan Stanley Dan Dolev - Instinet, LLC David Phipps - Citigroup Matthew Roswell - RBC Capital Markets.

Good afternoon, ladies and gentlemen, and welcome to the Exela Technologies Third Quarter 2018 Call. My name is Brian. I'll be your host operator on this call. After today's prepared remarks, I'll conduct a question-and-answer session. [Operator Instructions]. Please note, today's event is being recorded.

And with that, I'd like to turn the conference over to Mr. Jim Mathias, Vice President of Investor Relations. Please go ahead, sir..

Thank you, Brian. Good afternoon, everyone, and welcome to the Exela Technologies Third Quarter 2018 Conference Call. I'm here today with Ron Cogburn, Exela's Chief Executive Officer and Jim Reynolds, our Chief Financial Officer. Following prepared remarks made by Ron and Jim, we will take your questions.

Today's conference call is being broadcast live via webcast, which is available on the Investor Relations page of Exela's website, www.exelatech.com. The replay of this call will be available until November 15, 2018.

Information to access the replay is listed in today's press release, which is also available on the Investor Relations page of Exela's website.

During today's call, Exela will make certain statements regarding future events and financial performance that may be characterized as forward-looking under the Private Securities Litigation Reform Act of 1995.

These forward-looking statements are subject to known and unknown risks and uncertainties, and are based on current expectations and assumptions. We undertake no obligation to update any statements to reflect the events that occur after this call, and actual results could differ materially from any forward-looking statements.

For more information, please refer to the risk factors discussed in Exela's most recently filed periodic reports on Form 10-K and Form 10-Q filed with the SEC today, along with the associated press release and the company's other filings with the SEC. Copies are available from the SEC or the Investor Relations page of Exela's website.

During today's call, we will refer to certain non-GAAP financial measures. Reconciliations between GAAP and non-GAAP results we discuss on this call can be found on the Investor Relations page of our website.

As a reminder, financial results discussed on today's call reflect pro forma combined company results for the business combination of SourceHOV Holdings and Novitex Holdings, which closed on July 12, 2017.

Please note, the presentation that accompanies this conference call and an investor fact sheet are also accessible on the Investor Relations page of our website. We will now begin by turning the call over to our CEO, Ron Cogburn.

Ron?.

Thanks, Jim. Good afternoon and thanks everyone for joining us today. Let's turn to Slide number 4 and discuss our key financial highlights. We reported strong top line results with third quarter revenue of $383 million, an increase of 7% on a year-over-year basis. Revenue grew at a double-digit rate on a year-to-date basis, coming in at 11%.

Our revenue per FTE, a metric we closely track, has seen an 8% increase to $72,000 per FTE, up from $66,000 at the end of 2017. This growth is a direct result of our DigitalNow strategy, converting the lower automation BPO revenue into higher automation BPO revenue.

I will discuss this transformation in more detail in the presentation and demonstrate how this strategy is positively affecting our business mix. Our revenue per FTE metric remains one of the highest amongst our peers in the BPO industry. Now, moving to profitability. Adjusted EBITDA increased double digits on both a quarterly and year-to-date basis.

Adjusted EBITDA increased to $69 million or 24% on a year-over-year basis. Adjusted EBITDA increased 14% on a year-to-date basis. However, it could have been higher. Q3 was impacted by 2 main factors totaling about [$7 million], which were lower project revenue in our LLPS segment and the exit of a low-margin contract.

Also the increased market receptiveness to our DigitalNow strategy has exceeded all of our expectations, and therefore, we have accelerated our investments for future profitable growth. This key strategic initiative, when coupled with other factors I've just mentioned, will have a short-term impact on our adjusted EBITDA.

In consideration of these factors, we expect our full-year 2018 revenue to be between $1.58 billion and $1.59 billion, with a growth of 8.5% to 9% year-over-year. And we are now forecasting our adjusted EBITDA for the year to be between $280 million to $290 million. On a year-to-date basis, we have invested $60 million to drive growth and integration.

This amount includes $47 million of optimization and restructuring expenses, $6.5 million spent on the acquisitions, net of cash acquired, and $6 million year-to-date in our customer-facing organization to accelerate growth.

At the end of the third quarter, our liquidity was $124 million, including cash and cash equivalents, as well as the revolver, which remains undrawn. Additionally, we have delivered $48 million in savings year-to-date. Also in July, we went back to the debt markets and successfully repriced our term loan.

We achieved a reduction of 100 bps in the interest rate spread on our term loan. This is an important step as we continue to work towards lowering the cost of our debt. So, in summary, as I look at our financial results, I'm pleased to see the continued trajectory of our growth.

Now, let's turn to Slide number 5 and discuss how our financial performance is driving our business and how we measure our success from a business scorecard. We have branded our location-agnostic, high-automation BPO services, Enterprise SaaS offerings and our BPA suite as DigitalNow.

In October, we announced the signing of a contract which expands the relationship with an existing customer, a global bank, which we have worked with for over a decade. This contract is estimated to bring in $100 million in revenue spread over the next 3 years and is expected to kick off in early 2019.

Our strategy to grow within our good existing customers is working. We seek to build on our successful engagements to increase the number of statements of work and master service agreements. The results of this strategy is a broad and sticky revenue base.

We have a low customer concentration and at the end of Q3, our Top 150 customers contributed 68% of our revenue. Now here's a couple of important facts to note, we now have 10 customers generating over $25 million in annual revenue. This is up from 8 at the end of Q2 and 6 at the end of 2017.

Another important highlight is that we now have 249 customers generating over $1 million in annual revenue, which is up from 200 customers at the end of 2017. This increase is clear evidence of our land-and-expand strategy to grow our top line.

Additionally, I'm pleased to share with you that the investments we have made in our customer-facing organization have resulted in substantial increase to our pipeline, which is almost double from what it was last year.

Consistent with our DigitalNow strategy, we are seeing an increasing proportion of pipeline from higher automation deals and we're adding additional work streams and revenue streams with existing customers. Now let's move to Slide number 6.

Let me walk you through the Exela evolution over the past decade and how that journey has brought us to DigitalNow.

We began as a pure play BPO company with a revenue base of approximately $150 million in 2007, and today, we have grown that revenue over 10-fold to approximately $1.6 billion rounding from our 2018 guidance, which represents a CAGR of 22%.

Our revenue growth was a direct result of our strategy to evolve as our company and as a -- continuously to adapt to the changing markets and customer demands.

From a pure-play BPO to today, we have worked to move up the value chain and inject technology to convert low automation BPO into a higher automation BPL through robotic process automation and digital transformation, which we now describe as DigitalNow. DigitalNow enabled additional streams of revenue within our existing customers.

We transform our customers' operations over time using our proprietary BPA solutions for both on-site as well as off-site. This creates the opportunity for Exela to do more as our platform enables us to provide additional services and generate incremental revenue and profits. Now let's turn to Slide number 7.

Based on research, today our total addressable market is about $161 billion as of the end of 2017, growing at a 5% CAGR increasing to $207 billion by 2022. Now Exela's growth is across key industries and among leading companies in banking, healthcare, insurance, and others.

Among our 3,700 customers, we generate approximately $1.6 billion in annual revenue, which represents about 1% of the total addressable market for us. We look at the market like this, with only 1% share in a strategy of investing in the growing industries where we believe we can get the best yield, we are well positioned.

We are expecting our growth to be between 8.5% and 9% in 2018 according to our guidance versus the 5% growth in the total addressable market. In banking and financial services for instance, research indicates that the total addressable market will expand from $12 billion to $54 billion from 2017 to 2022.

Today, banking and financial services represents less than $400 million in annual revenue. We have ample opportunities to capture more of this market as evidenced by our recent announcement of the incremental contract signed with the global bank that I just mentioned.

The above total addressable market data does not include the in-house operations for the customers, which is a fertile ground for harvesting opportunities in our opinion. This was the case with this global bank that I just mentioned.

So between the total addressable market estimates and our ability to take over in-house operations, we are really encouraged with the opportunity for growth that is in front of us. Before I hand the call over to Jim for a discussion of the financials, I want to close with a few thoughts.

Exela is on an exciting journey as we transform customer processes through DigitalNow. In the 9 months through 2018, our investments in growth are yielding positive results including double-digit revenue and adjusted EBITDA growth. We feel really good about how the business is shaping up.

And now, I would like to hand the call over to Jim Reynolds, who will discuss our results, our financial results in greater detail.

Jim?.

Thanks, Ron. Let's start with Slide 9. Third quarter 2018 revenue was $383 million, an increase of 7% from pro forma Q3 2017 revenue. Our third quarter EBITDA was $44 million, an increase of $144 million. Our adjusted EBITDA for the quarter totaled $69 million, up 24% from Q3 of 2017.

Our EBITDA and adjusted EBITDA increased from last year, but it could have been higher in the quarter. Our third quarter was impacted by 2 items; we had lower project revenue in our LLPS segment and an exit from a low-margin contract, which will be good for us in the future.

The cumulative impact to EBITDA in the quarter for these 2 items was approximately $7 million. As we've mentioned previously, we are, and we will continue to make investments in our customer-facing organization. We are on track this year to book-and-bill more than 2x our initial revenue growth rate of 3% to 4%.

We are also very pleased seeing how our pipeline has transformed in size and increased in the number of high automation deals, which is consistent with our business strategy. Looking at the bridge from EBITDA to adjusted EBITDA. Overall, adjustments are down.

Walking through the bridge in the third quarter of 2017, we incurred $132 million in one-time charges, tied to the business combination to create Exela. The next adjustment in our walk is the optimization and restructuring charges. This item relates to our investments made to achieve cost savings.

As part of our 2018 guidance, we committed to deliver between $40 million to $45 million in savings. To date, we have achieved, approximately $48 million. In the third quarter of 2018, Exela incurred approximately $19 million in business optimization expense. A majority of these expenses impacted cost of sales.

As part of the increased concentration of higher automation deals, we are incurring business optimization costs. We expect these costs to decline as we implement our transformational model.

The last part of the box in the walk is Other, which primarily includes non-cash charges incurred on employee restricted stock units and the term loan debt reprice costs incurred. To summarize, year-over-year transaction costs have gone away and the gap between EBITDA and adjusted EBITDA has narrowed significantly. Moving to Slide 10.

Our pro forma P&L. From a revenue segment perspective, ITPS revenue totaled $307 million in the quarter, up 10%. On a year-to-date basis, ITPS revenue totaled $949 million, up 14%.

That increase is largely driven by our results from DigitalNow, some inorganic growth, offset by a decline in business with lower automation and an exit from a lower-margin contract. Healthcare revenue totaled $57 million in the quarter, up 1%. Year-to-date, healthcare revenue totaled $172 million, down 1%.

We believe that healthcare is well positioned to grow in the near term, driven by a few recent wins. LLPS revenue totaled $19 million in the quarter, down 14%. On a year-to-date basis, LLPS revenue totaled $19 million, down 14%. On a year-to-date basis, LLPS revenue totaled $65 million, down 2%.

As we have discussed, the results in this segment are event-driven and project-based. This segment has been impacted by the earlier settlement of a few cases. Looking at cost of revenues, growth profit margins were lower due to higher business optimization expense incurred in the current quarter.

We do expect the savings realization and continued transformation and ramp of contracts will improve gross margin in future periods. Looking to SG&A, on a year-over-year basis, excluding the impact of transaction costs, our SG&A declined due to the savings flow through.

This was offset by continued investments in our customer-facing organization as well as higher costs associated with being a public company. EBITDA improved by nearly $144 million compared to pro forma Q3 2017 and improved by $167 million year-to-date.

Driving much of this improvement in EBITDA was the absence of costs related to the business combination, growth in the business and savings flow through. Our adjusted EBITDA increased by 24% to $69 million in Q3 of 2018, compared with $56 million in Q3 2017.

On a year-to-date basis, the adjusted EBITDA increased by 14% to $208 million compared to $183 million for the comparable period. Our net loss for the third quarter improved by $102 million on a year-over-year basis to a net loss of $29 million. Year-to-date, the net loss improved by $106 million.

As a reminder, we have approximately $371 million of net operating loss carry-forwards available to offset pretax income. As of September 30, 2018, we have paid approximately $5.3 million in global cash taxes. In addition, our CapEx continues to be at the same levels as Q1 and Q2, around 2% of revenue. Turning to the capital structure on Slide 11.

On September 30, 2018, total liquidity was $124 million and net debt $1.383 billion. We had cash of $45 million, excluding restricted cash per our credit agreement, an undrawn a $100 million revolving credit facility, of which, $20.6 million was set aside for standby letters of credit.

The net debt is up from June 30 due to increased working capital uses. In the third quarter of 2018, we purchased 225,504 shares of Exela common stock for about $1.1 million. Since we launched the buyback in Q4 of 2017, we have purchased in total 1,043,497 shares. Our buyback program remains in effect and we will continue to be opportunistic.

On the next slide, our updated business outlook. We expect our full-year 2018 revenue to be between $1.58 billion to $1.59 billion with a growth of 8.5% to 9% year-over-year. We are now forecasting adjusted EBITDA for the year to be between $280 million to $290 million, representing a year-over-year growth of 14% to 18%.

This reflects the items we had discussed earlier. The higher end of our adjusted EBITDA range includes the potential SaaS high-contribution margin deals that are expected to be delivered by the end of the year, and may be recognized as revenue in 2018 depending on customer acceptance.

With respect to 2019, we will be dividing 2019 guidance as part of our year-end investor call. Until then, we have some items that you should take into consideration. We have discussed that the industries we're focused in are growing at approximately 5%. And we are growing above those rates.

We are on track this year to grow our top line by approximately 8.5% to 9% with adjusted EBITDA margins of 17.6% for the 9 months ended September 30 and 18% in the recent quarter. We have also improved our adjusted EBITDA margin year-to-date by over 50 bps.

With the investments we've made, the recent announced wins, we feel very good with how our business is shaping up as we exit 2018. Thank you. And with that, operator, I would like to open up the call for questions..

We will now begin the question-and-answer session. [Operator Instructions]. Today's first question will be from Joseph Foresi with Cantor Fitzgerald..

Hi. This is Drew coming on for Joe.

I was hoping you could discuss the opportunity with DigitalNow and how you expect this to impact growth moving forward?.

So, when you think about what we've done with our strategy to add higher automation work to lower automation BPO, as we started the year, we talked about business process automation, So if we take our business process automation, the digital transformation, and now, we use DigitalNow as sort of the descriptor for all of those things, as we go out to the market, the clear indicator to us of the interest in the market is how our pipeline has grown.

So literally, from now -- from the last year until now, we have seen the pipeline more than double with these types of opportunities. And as you recall, I've mentioned in previous quarters, we found early acceptance in Q4 of last year with the interest in the pilots that begin to generate.

So, as we've come through this year, we're beginning to see some of those pilots turn into contracts and awards for us..

And then -- so with the lower forecast of adjusted EBITDA -- and I know you guys aren't talking about 2019, but I was wondering, if you can give any high-level -- just looking out at how you guys are viewing adjusted EBITDA margins? And then, does anything change on the synergy timeline?.

Yes. So, with respect to 2019, I think our message, we're finishing 2018 very well. If you look at the past year, we had initial guidance on the top line of 3% to 4%. And because of the acceptance of DigitalNow and the opportunities, we're going to finish the year very strong between 8.5% and 9%.

If you're looking at EBITDA margins, we're looking at that, but if you look back at the past 4 quarters, our range and adjusted EBITDA has clearly been between 18% to 19%. We finished this quarter just at 18%. Our business, as you know, we have 90% visibility into our revenue.

These are long-term contracts, other than the LLPS segment, which is a little lumpy. So, we have really good visibility into our revenue and our contracts..

And anything changed on the synergy timeline?.

No, I mean, if you look at the synergies, we continue to execute on them. We feel good. We have, as I said, had $47 million-plus completed this year. We'll continue to drive those synergies through the business. One of the things we had to discuss, we are making investments in the business to drive the revenue growth.

It definitely does cost a little more to have higher revenue growth versus the 3% to 4%..

Next question will be from Brian Essex with Morgan Stanley..

I guess, I'd like to [Technical Difficulty]..

Pardon me, Brian. You're out of line. I had a lot of static. Maybe you would like to dial back in, we can get you back in. But the next question will be from Dan Dolev with Nomura..

So, great stuff on the top line, I see you're raising the guidance. But if I look at -- if I think about EBITDA, it looks like you're -- you said -- I think you called out about $7 million of kind of tougher EBITDA drag, right, in the quarter.

Is that correct, the $7 million for that low-budget contract?.

That's correct..

And I think you're raising at the mid -- you are lowering EBITDA by, I think with $17 million, $18 million and you also per my estimates, you do much better on the run rate of the savings, if you get $48 million days versus the $40 million to $45 million.

So why take it down by debt margin, is it just debt or is there something else?.

Yes I think within the 2 items that impacted us, those are short-term in nature, but will continue to flow through in the fourth quarter. So that being said, we'll be able to make up some of that and we will continue to drive through the synergies. But I think we feel good with the range of $280 million to $290 million.

We also have, as I said, some higher margin SaaS contracts that hit at the end of the year and we're expecting those all to flow through. So I think that between [$80 million and $90 million] we feel good about..

Is there an update on the savings, you were running at a $40 million to $45 million, now you're doing $48 million year-to-date?.

Yes, I mean we had guidance of $40 million to $45 million, we're above that. We'll continue to have some savings convert into Q4 and then we still have other initiatives underway that will help us in future periods..

The next question will be from Brian Essex with Morgan Stanley..

I don't know if it was just addressed, but I guess on a guide up in revenue, the guide down in EBITDA margins, could you help us -- maybe walk me through some of the puts and takes you have, what I would assume the better margin digital business, exiting a low-margin contract.

I would assume that'll give you a lift to margins, but you're investing back in the business.

Any sense for us to get a sense for in terms of both gross margin and EBITDA margin, how one time-ish are these investments or impact items, and how do we think about expansion from here on out?.

Sure. So if you take a look at the 2 items I mentioned, the LLPS and the on-site, that was a $7 million impact. And with the LLPS, those contracts in the on-site, it's gone. So it's not going to come back into Q4. So it has a carry-on effect.

With respect to other incremental revenue, it's coming through, we have some high-margin revenue that we're anticipating coming in, in the fourth quarter related to our SaaS sales. It's happened historically.

Through 2018, we feel good that we'll get some incremental flow through margin, but I think that a range of $280 million to $290 million is something we feel good about as we're exiting 2018..

And then as you reinvest back into the business, is there a level of EBITDA margins that you're committed to maintain? In other words, will you -- can you stay at this level, at the very minimum and then see margin expansion notwithstanding any kind of reinvestment or [call back]?.

Yes, and I think this is what I answered maybe when you dialing in. We -- if you look historically, the business has had the margins between 17% and 19% historically on an adjusted basis. We feel really good about those margins and that's why I referenced it towards the end of the call.

As we continue to drive the new business wins, there'll be -- depending on some of these deals, they do have some upfront costs, so it may take a little time to work through the system and this is something we've discussed historically with the ramp. But we feel good about the margins and where they are.

We're going to continue to deliver on the savings in addition..

[Operator Instructions]. Next question will be from Matthew Roswell with RBC Capital Markets..

First question is, if I look at your revenue guidance for the year, it seems to imply that the fourth quarter is going to have slowing revenue growth as well.

Could you walk through sort of what's driving that? And as part of that, do you have additional low-margin contracts that you're looking at getting out of?.

So, I think that we gave the guidance of $1.580 billion to $1.590 billion, which is up over last quarter, that equates to $395 million to $405 million.

Within our business, I think we've discussed before is, when we acquired Enterprise Solutions, they still had some low-margin business, but as we put in our technology and automation, we're looking to change that margin profile. This was an opportunity to get out of a contract that has shifted on us, and it was the right thing to do.

So we are a public company and we prefer to have profitable contracts versus contracts that goes the other way..

And then, on a bigger picture, have you noticed in the last, call it, 6 months or so any change in client demand either for your products or sort of in the industry in general?.

Well, so that's the right question to ask about the demand from the customers. And so, we have to measure that in a couple of ways, but the biggest way is the growth of our pipeline.

So -- and I think I mentioned this, maybe you heard a while ago, when we started in Q4 of last year with the story around automation and seen automation for us is going to be the, I guess location agnostic high, automation BPO services, the Enterprise SaaS offerings and our BPA suite, which we all -- we call that now DigitalNow, we began to find that there was an appetite in the market for this and that led to some pilot programs.

So as we came into this year, we saw our pipeline begin to build at a very accelerated rate. As we sit here today for these types of digital services, it's literally twice what it was last year.

So what we found is we went to our existing customers, when we went to our Top 150 customers, when we went to a -- what we call the Enterprise Solution customers, which is the old Novitex, it was well received, lots of interest, and so that's where you begin to see like this enterprise deal that I talked about.

This is a $100 million contract spread over 3 years. It starts at the beginning of '19. We didn't have those types of opportunities before we started, I guess, broadcasting and sharing the vision for the DigitalNow. So we're very excited about where this is going..

And then, I guess as part of that are you seeing clients shift money around to more of the DigitalNow solutions or are you taking kind of a -- is it coming out of there sort of operating costs?.

Well, look at it -- I was looking at it a little bit differently. So typically our competition is the in-house operations.

So, if you think about how they classify their own operational cost, we are approaching them that with the novel idea that we can come on-site and take over an entire operation like we've done with one of these large contracts, inject all of our DigitalNow technology or BPA suite, create automation, so now it becomes from low -- what I'll call low automation BPO to higher automation.

So for them, this is a chance to offload large groups of employees that are providing a process within the company and allowing us to transform that over time. This does take a little while to do, 24 months to 36 months from now, we'll begin to see the full run rate of all of the automation that we're pushing through.

So what you find is, whether it's a banking and financial services and insurance company, these are folks that are really interested in this type of operation, that's where we are finding the bigger opportunities..

Next question will be from Arun Seshadri with Credit Suisse..

Just a couple from me. First, I just wanted to get a sense for the extent -- how much free cash do you think you will generate in Q4 first. And then second, if you could sort of talk a little bit about 2019 at a high level, it sounds like you expect to continue to grow faster than your markets are growing.

Some sense for sort of broadly EBITDA margins for 2019 versus '18?.

Sure. If you take a look, for the full year, when you take the range of EBITDA from $280 million to $290 million, right, we have CapEx. It's currently running up just about 2%, slightly higher. So, you have CapEx of [$135 million]. You've got interest expense on the debt of $135 million, debt amortization of about $8 million.

We're saying, cash taxes of $10 million, and we've done some M&A, net of cash, probably $6.5 million. And then, we've spent about $47 million in Q3 on biz op. So, that kind of gives you the math without Q4 biz op and working capital changes. But as you know, we generate a lot of cash. We've, year-to-date, made some tuck-in acquisitions.

We've spent a little money on share repurchase, and we paid down some debt. So, that's -- we feel good about the amount of cash that the company is generating..

And then, could you make a comment about growth and margins in '19?.

Yes. So, I mean, I think we're going to provide more updated guidance on our year-end call. But if you look at the statement, we kind of went through our industry. It's growing at 5%. We're growing well above that. We said we were going to go 3% to 4%, we're finishing the year 8.5% to 9%. And these contracts are long-term in nature.

We have great renewal rates on our top line. So revenue based on what we have, the large contract we've sold, the size of our pipeline, we feel very good about 2019 as we're exiting '18..

Next question will be from David Phipps with Citigroup..

When we looked at the ITPS gross margin specifically, that one declined quarter-to-quarter.

Were there any special charges on from the 10-Q that were involved in that, so that the adjusted gross margin would be different, or is it somewhat of a mix with some of the new businesses going on, or maybe think around that?.

Sure. I think when we discuss some of the biz op and charges, a majority of them were in the ITPS segment. Out of the biz op, probably, 80% runs through our cost of sales and a majority really runs through the ITPS segment..

And when you look at the new $100 million contract you added, it's a 3-year transaction. So, it's about $8 million of revenue a quarter that were evenly spread.

Is that the right way to look at it that it's kind of evenly spread on revenue, or does it accelerate as you get into the back end of years?.

So, with this one -- we haven't talked about it a lot. But with this one, it will be more front-end loaded, I would say..

And when you look out and some of the pipeline you're looking at right now, I'm sure, you've got a lot of deals and deal sizes that you're looking at, is there -- are there anything meaningful that remains out there to be closed over the next quarter or so?.

What I would say is, we've talked about our pipeline, how we're very pleased, how it's doubled in size and the type. If you look at the investments we've made, that's helped us a lot. We have seen opportunities we haven't seen historically, because we're a much larger company now.

The combined company, close to $1.6 billion, we get invited to the table more often than not. So, we're very pleased with our size, the size of the pipeline, the type of deals. And when you can get $100 million contracts, that helps a significant amount on a go-forward basis.

As Ron also mentioned on the call, we now have over 10 customers with $25 million we're billing annually. That's up 2 customers from earlier, from the last quarter, and then, up 4 from last year. So our customers, we feel that we're getting a lot of traction in our land and expand. So, we feel good..

At this time, this will conclude today's question-and-answer session. And with that, I'd like to turn the conference back over to Ron Cogman for any closing remarks..

Yes. Thanks, everyone. We really appreciate you participating in the call today. We really appreciate the questions. We look forward to speaking to you and everyone on the year-end call. Thanks very much..

The conference is now concluded. We want to thank everyone for attending today's presentation. And at this time, you may now disconnect..