Good afternoon, everyone. At this time, I would like to welcome you all to the E2open Fiscal Fourth Quarter and Full Year 2022 Earnings Conference Call. I am Adam Rogers, Head of Investor Relations here at E2open.

Today's call will include recorded comments from our Chief Executive Officer, Michael Farlekas; followed by our Chief Financial Officer, Jarett Janik. And then we'll open the call for a live Q&A session.

Before we begin, I'd like to remind everyone that during today's call we will be making forward-looking statements regarding future events and financial performance, including guidance for our fiscal first quarter and full year 2023. These forward-looking statements are subject to known and unknown risks and uncertainties.

E2open cautions that these statements are not guarantees of future performance. We encourage you to review our most recent reports, including our 10-K and our 10-Q or any applicable amendments for a complete discussion of these factors and other risks that may affect our future results or the market price of our stock.

And finally, we are not obligating ourselves to revise our results or these forward-looking statements in light of new information or future events. Also during today's call, we'll refer to certain non-GAAP financial measures.

Reconciliations of non-GAAP to GAAP measures and certain additional information are included in today's earnings press release which can be viewed and downloaded from our Investor Relations website. And with that, we'll begin by turning the call over to our CEO, Michael Farlekas..

Thank you, Adam and thank all of you for taking time to join us for our fourth quarter and full fiscal year 2022 earnings call.

As we report on our first year as a public company, I'd like to take a moment to thank the entire E2open team for their outstanding efforts to get us to where we are now as well as all of our clients and partners who have supported us on our exciting journey of scaling our business nearly tenfold in seven years.

We are pleased to report that in fiscal 2022, we generated nearly $480 million in total non-GAAP revenue, exceeding our fiscal 2022 revenue guide by more than $4 million. The organic growth rate of our subscription revenue for the year was 9.8%. The overall organic growth rate for the year was 11%.

In addition, in fiscal '22, we generated adjusted EBITDA of $163 million, nearly 34% EBITDA margins, up 13% from fiscal 2021. We are a Rule of 40 company. When we became a public company last year, we presented the business with very attractive fundamentals and significant intrinsic value.

We said we will grow at 10% organically, we actually achieved 11%. We increased guidance 3x and then exceeded that guidance in every instance. Given we achieved our 10% growth sooner than expected, we are increasing our long-term growth target to 12% plus.

We expect to achieve 11.4% organic subscription growth for fiscal 2023, up from 9.8% in fiscal 2022. Our confidence in subscription revenue growth is borne from 90% of subscription revenue for fiscal '23 that is already contracted and our pipeline is the largest we have ever seen.

Our subscription revenue is accelerating faster than our services revenue sooner than we expected driven primarily by the more rapid success in our channel and partner programs which delivers higher subscription revenue but has lower attachment of services revenue. This was planned and expected and we expect that trend to continue over time.

As a result, we will increasingly focus our discussions and guidance on subscription revenue given it's 80% of our total revenue and generates 80% gross margins. Supply chains are vital and integral to large enterprise operations. In fact, companies are in the business of making and bringing products to market. That is what a supply chain is.

It's the very reason companies are in business. We have all seen the headlines and new stories of the critical importance of supply chain infrastructure improvements that are needed. We'll have digital infrastructure to support complex global supply chains are as important as the physical infrastructure.

Global supply chains are more complex than ever as large companies build agility and resiliency into their operations. Supply chain complexity is actually increasing. Globalization has increased in response to a global macro environment that has proven to be subject to rapid and dramatic change.

Enterprise-grade, scalable, cloud native, five-nines reliable software is required and necessary to resolve this complexity. The digital infrastructure that supports today's supply chains are largely on-premise, siloed and largely legacy. We are in the very early innings of the replacement of that infrastructure with a cloud-native infrastructure.

E2open sits at the epicenter of that digital transformation. That transformation will last for the foreseeable future. E2open is the largest provider of reliable enterprise-grade, highly scalable, cloud-native software, exclusively focused on end-to-end supply chains for the largest and most complex enterprises in the world. We are very global.

We have an end-to-end platform. We are built upon a network of over 400,000 partners and we have 600 of the world's largest companies that rely on us every single day. We are in the best position possible to capitalize on this very large market opportunity.

E2open is ideally positioned to take center stage for large enterprises as the need to improve their supply chain intensifies. The demand environment for E2open has never been better and we are leaning in to further accelerate our growth. We attribute our market strength through three areas.

Industry fundamentals, we have a massive overall TAM of over $50 billion for our current product set. The secular tailwinds are reflecting that industry growth from high single digits to 10%. Our supply chain issues are now affecting sales and top line revenue. The Board and the C-suite are paying closer attention.

That enables larger transactions for E2open and shorter sales cycles. Company fundamentals, we're a cloud-based SaaS company with $550 million in annual projected subscription revenue. We are at scale. There's a white space of over $1 billion within our own client base of 600 large enterprises. A new logo typically starts with us at around $400,000.

But that new client represents a 10x growth opportunity over the following three to five years. We've seen this pattern repeat over and over again. We have very long relationships with blue-chip clients across a wide range of industries. We have an average tenure of 15 years with our top 100 clients. Net retention in fiscal '22 was 108%.

We have a very attractive financial profile as well. That allows us to invest. We have great unit economics. 80% gross margin in our core business, subscription software, over 70% gross margins overall. Our growth rate is accelerating as we scale. We were 9.8% organic subscription in fiscal '22, projecting 11.4% for '23 on a much larger base.

We generate high EBITDA margins in the mid-30s with very high free cash flow of nearly 82% of EBITDA on an unlevered basis. We are, for fiscal '23, a Rule of 45 company and are now taking aim to be a Rule of 50 companies.

We believe this level of growth and margin performance is sustainable over time due to the long-term nature of our client relationships, exceptional unit economics and the industry and company fundamentals.

Because of our competitive advantage, the secular tailwinds and our financial profile that allows us to invest, we have the ability and desire to further invest in accelerating our growth. We can produce that level of growth for the foreseeable future at the current investment levels in sales and marketing.

We are increasing our longer-term growth algorithm from 10% plus to 12% plus and expect to reach that level within two to three years at our current level of sales and marketing as a percent of revenue. We can produce this trend line of accelerating growth and overall profitability for the foreseeable future.

That said and because of the massive market opportunity we see, we have made a strategic decision to further bend the growth upwards by making incremental investments in growth in fiscal '23.

We will invest an incremental $20 million in sales, marketing and channel development that will position us to reach 12% more quickly and increase the pace of growth acceleration to become a Rule of 50 business more quickly.

Over the past two quarters, we have done significant analysis on the strategic choice to use $20 million of what would have been EBITDA expansion in FY '23 to position us to further inflect our growth rate upwards as we look towards fiscal '24 and beyond. Our analysis found the following.

Given the very long-duration relationships we have, decades long for our largest clients, the return profile is extremely favorable for incremental investment and growth. The best analysis for incremental growth is the long-term value, or LTV, to customer acquisition cost ratio, or CAC.

Given our expectation that new logos grow to $5 million over a three to four year period and we retain customers for decades and those customers generate 80% gross margin for subscriptions, the LTV to CAC ratio is extraordinarily favorable.

Number two, we are taking share and I believe we can take more share by expanding our brand, our sales team and our channel partners. Lastly, the time is now. There has never been a time in my 20-year career in supply chain software where supply chains and the infrastructure to help them has been more of a board issue.

Now is the time to invest, not to pull back. For clarity, we expect our business to increase its growth rate to 12% over the next coming two to three years without this incremental investment.

We are making the strategic choice to reach that goal sooner as well as to bend the growth curve toward mid-teens organic strategic growth once we pass a 12% mark and focus on the next milestone to be a Rule of 50 companies. The investments will be made in three areas. One, investments in our brand to support incremental new logo sales.

We found our new logo program which we started last year was much more successful than we had even thought. Incremental sales personnel and associated infrastructure beyond what we would normally add each year. Additional training, support and staff for the partner ecosystem to drive incremental sales that are influenced by the integrator community.

In the final analysis, what we found was that long-term shareholder value is generated by having more subscription revenue as soon as we possibly can. We are metering the investment to make sure we use the money wisely.

And the $20 million investment was the amount of money we felt that could be spent and used in FY '23 wisely to get the most value for shareholders. E2open is a bigger business today. We are growing faster organically. We are more profitable.

We have significant competitive advantage and we are at the epicenter of a very long transformative cycle for the world's largest and most complex supply chains. We could not be more thrilled to be in the position we are. Allow me a few minutes to expand on our sustainable competitive advantage.

E2open has built a differentiated supply chain platform that creates sustainable competitive advantage through three important concepts. First, we are one operating platform.

We provide the greatest number of functional capabilities where our clients can use E2open for multiple areas of their supply chain versus other solutions that are largely disparate, single-point solutions which fulfill a need in only one area of our client's supply chain.

We eliminate the significant integration problem our clients have when they deploy multiple solutions for multiple providers. Our platform generates more value for our clients by allowing them to focus on orchestrating and optimizing their end-to-end supply chain from one platform, from supply to sales versus optimizing one function at that time.

Second, we bring real-time data from our client partner community to our platform to a proprietary network over 400,000 reusable connections. Our network connects the thousands of trading partners our clients need to orchestrate their complex supply chains to our platform, enabling a live and connected supply chain operations center.

This compares to the current alternative of siloed on pros applications connected with, frankly, spreadsheets and e-mails. Lastly, because we are both broad and deep, we are increasingly attracting more integration partners that want to build their growth along with ours.

A great example of this is our recent announcement that KPMG is building a practice around E2open. We are the largest provider of cloud software for supply chain. We have the most functional capabilities. We have the largest network. E2open grows faster as we get larger.

As you remember, in October, E2open published its inaugural ESG report, highlighting the company's commitment to environmental, social and governance practices, including sustainability, workforce diversity, ethics and compliance and how we help our clients improve agility and resiliency in their supply chains.

Let me provide some details regarding our ESG initiative. Last year, E2open combined forces with BluJay Solutions which enables our clients to extend their supply chain capabilities. By improving efficiency and effectiveness of logistics operations, we can directly reduce emissions as well.

E2open's global trade application utilizes our proprietary global knowledge repository to empower teams not only to reduce cost and improve efficiency but also ensure timely decisions to ensure governance and adherence to the changing environment of global trade. Clients like Air France-KLM join our net growing network as well.

By implementing a multi-enterprise inventory optimization strategy, utilizing our business planning and supply chain management solutions we are proud to support Jaguar Land Rover's reimagine strategy which incorporates sustainability.

Having a more connected supply chain not only will help them achieve sustainability goals but also the value that Jaguar originally found when they implemented our solutions. We held our first user conference, Connect, in March. It sold out two weeks ahead of the conference.

And I have to tell you I've been doing this for a long time, that rarely happens. I can't remember that ever happened. We're holding our European conference in two weeks. That sold out. We are experiencing robust demand from new clients and existing clients. We're also very proud of the continued recognition we received from analysts.

We were named a leader in the IDC MarketScape on worldwide global trade management applications. This is the industry's only assessment for global trade management. We were named a leader in the Forrester Wave Channel Incentives Management Q1 report.

Report states that E2open's CIM solution continues to capture the attention and win rate of technology, industry and manufacturing. Finally, E2open was named leader in the Nucleus Research's Supply Chain Planning Technology Value Matrix for the third year in a row. Lastly, in March, we announced that Jarett Janik, our CFO, will be retiring.

I want to thank Jarett for his dedication over the past four years, completing six acquisitions with us and guiding us from a private company through an IPO and to the global technology company we are today. Jarett's a great friend and a terrific partner. We will miss him greatly.

We announced this morning that Marje Armstrong will take over as CFO on May 16. Marje's incredibly well-rounded financial experience cuts across several key areas that position her as a perfect strategic partner to help lead E2open to the next level, driving growth as we scale the business.

From finance leadership positions at public and private SaaS and B2B software companies to extensive Wall Street experience, Marje is the ideal fit, particularly at this pivotal stage in our growth as a public company.

We're excited to welcome Marje to the E2open family and Jarett will remain with us through the second quarter to ensure a smooth transition. In summary, our fourth quarter and fiscal year results were exceptional on their own merits. But we delivered these results as we successfully integrated a business 50% of our size in less than six months.

This is a testimony to the exceptional team we have. We are excited about the multiple growth opportunities in front of us and we remain focused on executing our core strategy. With that, I'll turn it over to Jarett to provide more detail regarding our financial results.

Jarett?.

Thank you, Michael. I want to start by thanking all my colleagues at E2open, particularly you, Michael, the rest of the executive team and, most especially, my team in accounting, finance, IT and corporate development. I believe E2open is in great hands with Marje Armstrong as the new CFO.

Working with the extraordinarily talented people at this great company for the last four years has been the highlight of my career. It's also my pleasure to round out my tenure here, reporting on such a strong finish to our first full year as a public company as well as the exciting performance we have relative to the financial year we just entered.

Let's start quickly by touching on our longer-term growth trends and remind everyone on what we said last year and how we are progressing towards them today. Because of our momentum in progress, we exceeded our long-term organic revenue growth target more quickly than expected and are raising our long-term organic revenue target to 12-plus percent.

We believe we can grow at this rate for a very long time. And that said, we also believe we can improve the trajectory beyond 12% which is why we are making the strategic decision to invest in growth now. We have operating leverage in our business which you can see in our margins.

We will operate in the mid-70s for gross margin and mid-30s or greater for our EBITDA margin. We will continue to invest in our ability to grow faster as we grow larger, balanced with the appropriate return on those investments.

We will continually reevaluate these targets and update you as our business expands and as we continue to invest in the company to accelerate our growth rate. I want to provide a brief update of our recent acquisitions. We are near the tail end of the execution phase of our integration of BluJay Solutions that closed on September 1, 2021.

Total synergies related to the recent BluJay combination are now projected to be better than the $25 million we previously stated and we have realized over 80% of those synergies as of our fiscal year-end. Total synergies related to the recent Logistyx combination are projected to be just over $10 million.

The company expects to achieve between 70% and 80% of run rate savings by the end of fiscal 2023. Realized synergies, we expect to be 30% to 50% complete in fiscal 2023. And to remind you, those represent the portion of those action synergies that have been recognized in earnings during the period presented.

Although profitable last year, Logistyx' EBITDA wasn't significant and the vast majority of their EBITDA contribution comes from acquisition-related synergies.

While absorbing the natural headwinds of the return from COVID on our expense base and slightly higher employee costs due to current labor market conditions, EBITDA would have reached $240 million or an expansion to 35% to 36% of revenue.

As we previously discussed, we are making a strategic investment to further inflect our growth rate to beyond 12% in the coming years. This comes at a cost of $20 million in fiscal 2023 that will result in an EBITDA of 32% to 33%, inclusive of this additional strategic investment. More on this topic in a few minutes.

As Michael mentioned, we are pleased with our performance and delivered another solid quarter to end the year. Next, I'll review our fiscal fourth quarter and fiscal year 2022 results and then I'll comment on our full fiscal year 2023 financial outlook. Thereafter, we'll open the call to your questions. Moving to our P&L.

I'll talk about our results on a non-GAAP basis. We show a reconciliation of GAAP measures in the press release which is available in the Investor Relations section of our website at e2open.com.

We generated subscription revenue in the fiscal fourth quarter of $122 million, reflecting an organic revenue growth rate of 11% on a pro forma basis and as a result of additional sales for both new logos as well as cross-sell, upsell across our client portfolio.

The principal non-GAAP adjustment to revenue in the period is related to the amortization of the fair value adjustment to deferred revenue resulting from the business combination in February 2021 which was material in fiscal 2022 but will be immaterial in fiscal 2023.

So that we can provide clear and transparent organic growth comparisons year-to-year, we will continue with this approach for the remainder of fiscal 2023 and we'll end the practice as we enter fiscal 2024.

Our fiscal year '23 revenue will be strictly on a GAAP basis and we will provide the non-GAAP revenue in the prior period so as to maintain proper comparability. As Michael mentioned earlier, our subscription growth rate is accelerating faster than our services growth rate due to the planned expansion of our channel ecosystem.

Professional services and other revenue was $28 million, reflecting an organic growth rate of over 7% on a pro forma basis. We reported total revenue in the fiscal fourth quarter of $151 million, reflecting a total organic revenue growth rate of 10.2% on a pro forma basis.

Our gross profit was $107 million in the fiscal fourth quarter, reflecting a 12.7% increase in gross profit on a pro forma basis. The increase in gross profit was primarily related to new subscription sales from prior periods. Our gross margin was 71.1% for the fourth quarter of fiscal '22 compared to 69.5% in the comparable period in fiscal '21.

Adjusted EBITDA was $54 million on a pro forma basis. The adjusted EBITDA margin increased to 36% for the fourth quarter of fiscal '22 as compared to EBITDA margin of 33% during the fourth quarter fiscal '21 on a pro forma basis.

These periods do not include the full cadence of expenses we expect to incur during fiscal '23 as we turn to more normal levels of travel, in-person marketing events and office attendance. Now I'll recap our full fiscal year 2022 results, again focusing on non-GAAP results.

We generated total revenue in the fiscal year '22 of $479 million, reflecting a total organic revenue growth rate of 11.1% on a pro forma basis and $4 million better than the midpoint of our revised guidance for the year.

Broken down by reporting category, subscription revenue was $389 million, reflecting an organic subscription revenue growth rate of 9.8% on a pro forma basis. Professional services and other revenue was $90 million, reflecting a growth rate of over 17% on a pro forma basis.

The increase in services revenue for the year reflects a return to normal for our services business during the year as compared to fiscal 2021 which was impacted by delayed delivery of services due to the COVID-19 pandemic, especially early in fiscal 2021.

Gross profit was $344 million, rising 13.8% year-over-year and representing a 71.8% gross margin. Our adjusted EBITDA was up 13.1% to $163 million compared to $144 million in the prior fiscal year on a pro forma basis and ending the year with a 33.9% adjusted EBITDA margin.

This quarter and in response to investor feedback, we've included several new measures, including unlevered free cash flow and adjusted earnings per share to provide further clarity and transparency to our financial performance.

We've also provided historical information on revenue from our recent acquisitions to assist in the understanding of our pro forma organic growth calculations as well as metrics for our trailing 12 months of gross and net subscription retention rates.

We measure our unlevered free cash flow utilizing adjusted EBITDA less normalized CapEx to remove the M&A-related activity within each component of free cash flow. For the year, we generated $132.6 million in unlevered free cash flow which represents a nearly 82% flow-through of EBITDA to cash flow on a normalized unlevered basis.

We measure our adjusted EPS starting with adjusted EBITDA and then subtracting normal depreciation and interest expenses and normalized income tax expense. We compute EPS utilizing an adjusted basic shares outstanding. For the fourth quarter and fiscal year 2022, we reported adjusted earnings per share of $0.08 and $0.24 per share, respectively.

This adjusted earnings per share equates to our as-reported figures does not include pro forma profitability from any acquisitions. As of February 28, 2022, E2open's trailing 12-month gross subscription retention rate was 95% and the trailing 12-month net subscription retention rate was 108%.

Just as a reminder, our net subscription retention rate includes upsells, renewals and price increases as well as down sales and churn. Earlier this calendar year, we announced a share buyback program authorizing us to repurchase up to $100 million in our Class A common stock.

And earlier this month, we announced an expansion of our existing term loan. These actions, along with our natural operating cash, provides us with significant flexibility as we think about our capital allocation for the balance of the year. We have the liquidity to fund the remaining purchase price payments of Logistyx with 100% cash if we so choose.

We also have the ability with our balance sheet cash and cash that we will generate this year to execute a repurchase of outstanding securities given our current share price which we intend to pursue in the coming months. Now, I'd like to finish by providing you with our guidance for the fiscal year we just entered, our fiscal year 2023.

We expect our GAAP subscription revenue for the fiscal year to range from $545 million to $553 million, representing an 11.4% organic growth rate at its midpoint. For the full fiscal year 2023, we expect total GAAP revenue to range from $681 million to $689 million, representing an 11.2% organic growth rate at the midpoint.

As noted earlier, we expect subscription revenue to grow slightly faster than total revenue as our services revenue will grow more slowly as we increase our channel focus. We began to see this in our most recent fiscal fourth quarter. Non-GAAP gross profit margin is expected to be in the range of 69% to 71% of GAAP revenue.

Adjusted EBITDA is expected to be between $237 million to $243 million or 35% to 36% of GAAP revenue prior to the strategic investment we're making in sales and marketing.

Without this strategic investment, we would be expanding our EBITDA margins from the 33.9% reported for fiscal '22 to 35% to 36% for fiscal '23, continuing the expansion of our margin as we grow and as we have experienced with our past performance.

Adjusted EBITDA, including this $20 million investment, is expected to be between $217 million and $223 million or 32.1% of GAAP revenue at the midpoint of this range.

Finally, quarterly GAAP subscription revenue for the fiscal first quarter 2023 is expected to range from $129 million to $131 million, growing 11.1% for the quarter on a pro forma basis.

Allow me to underscore what we have mentioned in the past that due to seasonality and timing of larger contracts, our quarterly year-on-year growth rate often varies from quarter-to-quarter. And to illustrate, a $1 million change in subscription revenue in a given quarter is approximately 75 basis points of growth in that given quarter.

We have 90-plus percent visibility into our subscription revenue which is already contracted for fiscal '23 and have great confidence in our guidance for the coming year. We have included in the earnings presentation a bridge highlighting the components of our adjusted EBITDA guidance for the current fiscal year.

To recap and starting with our fiscal '22 reported EBITDA, we will pick up approximately $35 million in expanded EBITDA from having a full year of BluJay and Logistyx in our reported fiscal '23 results.

Our revenue growth, net of incremental costs to support this revenue and which also includes the headwinds related to return to travel, in-person marketing, events and offices, translate to a 25% margin on the incremental revenue which is dilutive rather than expansive due to these headwinds.

We will earn an additional $25 million in synergies between both BluJay and Logistyx in fiscal '23. Together, this gets us to a 35% EBITDA margin with $240 million in adjusted EBITDA.

The strategic investments in sales and marketing, as noted of $20 million, brings us to a projected as-reported EBITDA of $220 million or 32.1% which is our guidance for the full year earnings.

In summary, E2open posted its fifth consecutive strong quarter as a public company, demand continues to grow for our solutions and, we remain focused on executing our growth strategies to capitalize on the multibillion-dollar market opportunity that lies in front of us. With that, we would now like to take your questions.

Adam, we're ready to begin the Q&A session after a brief pause..

All right. Thanks, Jarett. Please give us a moment to turn our cameras on and get situated. Our first question today will come from David Ridley-Lane of BOA..

I understand the need to invest into the market demand here. But how should investors judge the progress and returns? If this is geared more towards new logos, the immediate benefit may not be as apparent in revenue.

So what are the metrics that you're looking at and what should investors expect?.

Yes. What you can expect from going forward is greater bookings for us and pipeline build over the coming year. And that will support expanding our growth rate into '24. So you have to think through the time between investment and then revenue flow through given our model.

So we have long sales cycles and then we have bookings that translate into revenue after that. So you should see us expanding our revenue into '24 because of this investment..

Got it. And then interesting observation about KPMG starting E2open practice and your commentary around services growth.

Are you starting to see that broader partner ecosystem contribute more? And is that influencing sort of the investment there? How is the landscape changing for you?.

Considerably, as we noted, our subscription revenue growth for '23 is growing considerably faster than services. And that's a function of getting more subscription revenue through partners and through the ecosystem. So that's starting. And we, frankly, expect that to happen later in the cycle.

As we talked about, we invested in the channel really started the second half of last year and made some really strong investments there. It's coming through faster and we expect that to continue. And it's not just KPMG. We have several more that we're talking to as we go forward.

So we expect this to be a significant driver of subscription growth over the next three to five years..

Yes. And David, I would think about it, to add to that point, as first, the ecosystem starts to build their own professional services practice around our product. And then as that matures, they start actually bringing to us new subscription, new product, new penetration within those customer bases.

But it typically starts with them participating in our services projects to learn our product offering and then, subsequently, the flow-through or pull-through of actual subscription software contracts..

Next question will come from Taylor McGinnis of UBS..

So I want to touch on the net subscription retention of 108%. Can you maybe provide, one, more context there? Is that for both E2open and BluJay as if BluJay was in the business at the start? And then secondly, if I look back, I think metric was 107% which was basically in line with the total organic growth.

So because this year, growth was closer to 10% on the subscription line and above that, 108%, it seems that some of the new logo efforts you've done this past year are materializing.

So can you touch on that and how we should think about this metric as well as the mix of expansion in new evolve over time given some of the investments that you're making?.

Sure. I'll let Jarett chat about the -- including BluJay, in a second but just talk a little bit about the new logo sales. As we had mentioned before, a new logo for us comes in at a nice amount of around $300,000 to $400,000. But we expect that new logo to be a $3 million to $4 million, $5 million client in three to five years.

So we see expansion within a new client base. So to answer your question, we started a new logo sales team beginning of last year. As we said, that had materialized into revenue much more quickly. So to answer your second question, yes, it's because our new logos has been more successful.

But the importance of new logos has a lot more to do with building and compounding our business over time than just the revenue flow-through in the current year. And Jarett, maybe you can touch on the 108% metric..

Yes, absolutely. Taylor, we did go in and adjust to get to a like-for-like full year TTM measure. So it includes BluJay for the full year. The other way I think about it is our growth rates ticking up, our net retention's ticking up.

The new logo bookings we've seen tick up but the rev rec around the new logo bookings is somewhat late in terms of how it impacts the revenue growth rate. So I think over time, you'll see us continue to move as the cross-sell, upsell opportunity expands.

As we get farther away from the more time on target with the BluJay customers, you'll see the 108% tick up. And then you also see the growth rate tick up driven by -- even though small in relative nature, the revenue from the new logos that we signed this year will be more significant next year than they were last year, if that makes sense..

Yes, that makes a lot of sense. And maybe building on that, so you talked about some of these key metrics, right, picking up. But if we look at the full year subscription revenue guide and as well as the 1Q guide, it's in line with what you guys have done the last two quarters.

So can you maybe just talk about when you think about -- when you just raised the long-term growth guide to 12% plus and I believe BluJay and Logistyx were growing at a similar level to E2open prior to their acquisitions, so just when you're starting to think about when some of these cross-sell synergies and that potential can really start materializing..

Yes. So when we laid out -- first comment, the first quarter, we got visibility into -- good visibility of what we're going to do. And it's very dependent, as I noted in the call, on the timing of when things renew and when things were signed. And those can have meaningful impacts on the growth rate in a given quarter one way or another, number one.

Number two, I think as we've laid out in the past, we are going to put out guidance that we feel very comfortable that we can meet and achieve. And so we're not going to go to the very edge of what we think might be possible and then miss, if that helps kind of understand the more recent quarters versus our full year and Q1 guide..

Our next question comes from Nick Mattiacci from Craig-Hallum..

It's Chad actually.

I'm sure we can back into this, Jarett but just can you kind of give us an idea of what you're baking in into the fiscal year '23 guide for Logistyx and maybe even more specifically on the service and subscription revenue segments?.

Yes. So we disclosed when we bought the business in March that it is growing. We expect it to grow about in line with us, so 10% plus, 11%. Whatever you want to use in your model will be pretty materially close.

Their prior year was $40 million in total revenue, some of which was historic license sales for legacy products that's similar with what we acquired with BluJay. We will cease doing those kind of bookings.

And that's where we drive the consistent growth rate that we're seeing in our business for the coming year, so if you think about that $44 million, $45 million revenue contribution. Their services component is similar to ours, maybe a little bit more -- slightly more on the services side than on the software side but not drastically different..

Okay, got it. That helps. And then maybe for Michael. So some players in your ecosystem have reported in the last week, notably Manhattan last night or yesterday and I mean extremely bullish on the supply chain demand environment.

New logo activity very strong, or at least they stated it was and it looked like in the metrics, talking about EMEA being strong, U.S. being strong and kind of modernization of supply chain and it's really happening and so forth. And certainly, your new logo bookings looked strong again this quarter.

And we had SAP which ironically talked very aggressively towards supply chain demand last Friday. I guess, I assume we should imply you're seeing the same things from a demand signal standpoint.

Is there -- what's the limiting factor for you guys from a growth acceleration standpoint?.

Yes. This is one of the strongest environments I've seen. I've been in this particular market for essentially my entire career. The reality is, as companies have a lot of siloed applications that are on-premise that suboptimize their entire supply chain and they're changing and they're changing more rapidly. So this is a very strong environment as well.

In terms of limiting factors, I think it's just you have to put yourself in the shoes of our client base which is very, very large-scale companies. And they know and they recognize that when they install our software or signed a subscription with us, that's likely a 10- to 20-year investment or a 10- to 20-year decision.

So the nature of our sales cycles are long and oftentimes are looking start months, sometimes years, prior to when we signed them. So the limiting factor for us is more starts, the limiting factor for us is getting more pull-through from the ecosystem, as Jarett mentioned and getting more partners kind of contributing to our overall revenue.

That's really the reason for the strategic investment is due accelerate our growth faster than we are today. So we're seeing nice growth acceleration and we think we can do more and we're leaning into that growth..

Yes. And if I just -- maybe one last one for me. If I look at the chart you put up in which kind of there were three time line items and then three kind of revenue subscription growth and net retention items on there. And you talked about at IPO fiscal year '23 in the future. And if I look at it and I understand conservative in nature.

But if I look at kind of new logo contribution and understand the timing of revenue rec there and the net retention expansion that you're talking about going forward -- I don't want to kind of get ahead of you but it seems like with 30% bookings from new logos, kind of roughly 1/3 of the growth rate potentially from them that, let's just say, 110% net retention and only 12% subscription growth seems pretty conservative.

And I understand timing and whatnot. But if that timing eventually kind of catches up, right, in license. And so how do....

I focus on the plus..

Yes, Chad, we weren't doing no new logos before. We were doing 15%. So it's not a full 30% that's brand new and from a growth rate perspective. So we were close to 10%, with 15% coming from new logo. We up ticked that to 30% from new logo and go to 12%. I think we see upside in the market to go beyond 12% and to make that investment..

Yes. I guess just kind of to my point, if we're flipping the script in subscription is going to really drive the growth acceleration, the 11.4% organic this year, I mean 100 bps annually of acceleration there seems like a conservative way of looking at the growth rate of the business overall..

Yes. I think I would say that as a newly public company, the most important thing for us is to set targets we can hit and make sure we can hit those targets. We've done that now as our fifth report in a row. And that we've raised guidance and we have exceeded that as we went. So we see a robust environment for demand.

We have a very competitive -- a lot of competitive advantage in our product. We have 600 of the world's best companies that we can do a lot more with and $1 billion of open TAM white space within that client base. So yes, we think we can accelerate our growth as we get bigger for a long time to come.

And we think we can inflect that growth curve upwards by making this investment. That's why we're doing it because we see such strength in the marketplace. In terms of the 12% plus in the future, I would say I focus on the plus. And then as we develop our next level of information, we'll certainly update everybody as we go..

Great. It's great to see the acceleration in all the metrics. Nice job..

Thanks, Chad..

Our final question comes from Mark Schappel of Loop Capital..

With respect to the Ocean booking platform, have you seen any slowdown in that business given the recent port delays and congestion that's been building up around China?.

Yes, we do see that. We saw the uptick in September after COVID pretty dramatically. And really since, I'd say, the December kind of time frame, we've seen that kind of taper off. Part of that is demand is definitely not as strong as it was overall. So that's normalizing back to almost to where it was pre-pandemic.

And then certainly, the lockdowns aren't helping. And obviously, what's happening in Ukraine isn't helping either. So yes, we see that probably sooner than anybody and we're seeing it flow through on our daily bookings. Just one comment on that, though.

That has no influence on our revenue since we're not -- we don't have the volumetric component for the revenue side. So whether that goes up or down, our revenue is the same..

Okay, great. That's helpful. And then on a similar vein, given the trade disruptions related to the sanctions on Russia, have you seen an uptick at all or an activity uptick in your global trade management business which you....

Yes. And also, we've seen also an uptick, not just for that but also because of the acquisition of BluJay in that those two solutions go hand-in-hand. If you go back to our overall strategy markets, we look for complementary solutions that add value to things we have and we add value to the things we add to our platform.

And that's a great example, because when you ship something, you have to kind of know you allowed to ship it there. So those two things give us a very differentiated product. But in terms of sanctions, I'll give you some examples. These actions are changing daily and our clients rely on us to update them and update our software.

So to give you an example, every day, we make changes to that global trade platform and that's automatically put through to our client software version without them doing anything or not even knowing about it.

So every day, we're updating the sanctions in our -- and it's one of the value we drive to our customers is to make sure that they know that they're in compliance just by operating our software. So it's been an uptick and also tend to be valuable for our clients..

That concludes our call this afternoon. Thanks, everyone, for attending..

Thank you..

Thanks, everybody..